Connecting Classical and Early Neoclassical Views on Savings and Capital Formation to Modern Growth Theory Through the Lens of F. P. Ramsey

Francis E. Raymond ()
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Francis E. Raymond: Bellarmine University

Eastern Economic Journal, 2024, vol. 50, issue 1, No 3, 54-78

Abstract: Abstract We investigate the origins of modern growth theory using Ramsey’s seminal A Mathematical Theory of Saving (1928) by dividing Ramsey’s optimal savings problem into two principal components, (1) the relationship between personal savings and the formation of capital, and (2) the optimal intertemporal balance between consumption and savings. The first component serves as a philosophical conduit for surveying classical and early neoclassical perspectives on savings and capital formation. The second details early neoclassicists’ consideration of mathematical methods and intergenerational welfare. Taken together, we create a pathway between early discussions of savings and capital formation, and the origins of growth theory.

Keywords: Savings; Capital formation; Time-preference; Intergenerational welfare; Growth (search for similar items in EconPapers)
JEL-codes: B00 D63 E21 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1057/s41302-023-00262-1

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