A Characterization of Ramsey Equilibrium in a Model with Limited Borrowing
Kirill Borissov and
No 2013/08, EUSP Department of Economics Working Paper Series from European University at St. Petersburg, Department of Economics
We investigate the convergence property of the capital stock sequence in Ramsey equilibria with limited borrowing by the households. In our model, at the beginning of each period, households are allowed to borrow against their end of the period wage income. Under this assumption the capital stock sequence converges to the steady state stock irrespective of the technology and turnpike property holds in every Ramsey equilibrium.
Keywords: Ramsey Equilibrium; Limited Borrowing; Convergence of capital path (search for similar items in EconPapers)
JEL-codes: C61 D61 D90 O41 (search for similar items in EconPapers)
Pages: 20 pages
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Journal Article: A characterization of Ramsey equilibrium in a model with limited borrowing (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eus:wpaper:ec2013_08
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