Two Ways to Rule Out the Overconsumption Paths in the Ramsey Model with Irreversible Investment

Diego Comin ()

Working Papers from C.V. Starr Center for Applied Economics, New York University

Abstract: In this note I develop two approaches to rule out the overconsumption paths in the Ramsey model with irreversible capital. The ørst focuses on the multiplier of the irreversible constraint and is applied to the situation where preferences are CES and the production function is Cobb-Douglas. The second, relies on a revealed preference argument and is used to rule out overconsumption paths when the preferences are strictly concave and the initial level of per effective capital is below its steady state level.

Keywords: RAMSEY GROWTH MODEL; IRREVERSIBLE CAPITAL; OVERCONSUMPTION PATHS (search for similar items in EconPapers)
JEL-codes: O4 C6 (search for similar items in EconPapers)
Date: 2000
View list of references

Downloads: (external link)
http://econ.as.nyu.edu/docs/IO/9188/RR00-17.PDF (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cvs:starer:00-17

Ordering information: This working paper can be ordered from
C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012

Access Statistics for this paper

More papers in Working Papers from C.V. Starr Center for Applied Economics, New York University
Address: C.V. Starr Center, Department of Economics, New York University, 19 W. 4th Street, 6th Floor, New York, NY 10012
Contact information at EDIRC.
Series data maintained by Anne Stubing ().