On the Stability of the Ramsey Accumulation Path

Enrico Bellino

Chapter 4 in Sraffa and the Reconstruction of Economic Theory: Volume One, 2013, pp 70-104 from Palgrave Macmillan

Abstract: Abstract Infinite horizon neoclassical optimal accumulation theory is characterised by an analytical apparatus that now pervades several fields of theoretical analysis: capital theory, growth and value theory, macrodynamics, etc. In this context the equilibrium solutions take the form of saddle paths which are, therefore, unstable paths. The convergence of these solutions to the steady-state equilibrium is then ensured by imposing a transversality condition, that is, a condition which guarantees the optimality of the solution when time tends to infinity.

Keywords: Marginal Utility; Transversality Condition; Equilibrium Path; Infinite Horizon; Future Consumption (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1057/9781137316837_5

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