Ankara : The Department of Economics, Bilkent University, 2008.Thesis (Master's) -- Bilkent University, 2008.Includes bibliographical references leaves 30-31.This thesis analyzes the qualitative implications of the strategic interaction
on the standard Ramsey model in terms of catching up. We have shown
that the strategic interaction among agents in the economy leads the poor
to be able to catch up with the rich, which is not the case for the standard
Ramsey model where the initial wealth differences perpetuate. Secondly,
within this framework, we incorporate the relative wealth effect and conclude
that the catching up amoung agents depends on the share of two classes in
the economy. If the share of two classes is same, there exist unique symetric
steady state, whereas if the share of two classes are different the steady state
is assymetric. Morever, the steady state level of aggregate capital stock is
higher than the that of standard Ramsey model. Finally, we introduce the
relative consumption effect and reach the conclusion that whatever the share
of classes, the gap between the initial wealth level of two classes will disappear
in the long run. In addition, the steady state level of aggregate wealth level
is same with the that of standard Ramsey model.Özer, MehmetM.S
