The discrete Ramsey model with decreasing population growth rate

Abstract

This paper extends the Ramsey-Cass-Koopmans growth model of optimal capital accumulation in discrete time by introducing a generic population growth law that satisfies the following properties: population is strictly increasing and bounded, and the population growth rate is decreasing to zero as time tends to infinity. We show that the optimization problem admits a unique solution that can be characterized by the Euler equation. A closed-form solution of the model is presented for the case of a Cobb-Douglas production function and a logarithmic utility function. In contrast to the original model, the solution is not always monotone.SCOPUS: ar.jinfo:eu-repo/semantics/publishe

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2013/226795oai:dipot.ulb.ac.be:2013/226795
Last time updated on February 23, 2017

This paper was published in DI-fusion.

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