On the existence of a Ramsey equilibrium with endogenous labor supply and borrowing constraints

Stefano Bosi () and Cuong Le Van ()
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Stefano Bosi: THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique
Cuong Le Van: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, University of Exeter Business School - University of Exeter, VCREME - Van Xuan Center of Research in Economics, Management and Environment

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Abstract: In this paper, we study the existence of an intertemporal equilibrium in a Ramsey model with heterogenous discounting, elastic labor supply and borrowing constraints. Applying a fixed-point argument by Gale and Mas-Colell (1975), we prove the existence of an equilibrium in a truncated bounded economy. This equilibrium is also an equilibrium of any unbounded economy with the same fundamentals. Finally, we prove the existence of an equilibrium in an infinite-horizon economy as a limit of a sequence of truncated economies. On the one hand, our paper generalizes Becker et al. (1991) because of the elastic labor supply and, on the other hand, Bosi and Seegmuller (2010) because of a proof of global existence. Our methodology can be also applied to other Ramsey models with different market imperfections.

Keywords: Existence of equilibrium; Ramsey model; heterogeneous agents; endogenous labor supply; borrowing constraint.; Existence de l'équilibre; modèle de Ramsey; agents hétérogènes; offre de travail endogène; contraintes d'emprunt. (search for similar items in EconPapers)
Date: 2011-07
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00612131v1
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Citations: View citations in EconPapers (8)

Published in 2011

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Related works:
Working Paper: On the Existence of a Ramsey Equilibrium with Endogenous Labor Supply and Borrowing Constraints (2011)
Working Paper: On the existence of a Ramsey equilibrium with endogenous labor supply and borrowing constraints (2011)
Working Paper: On the existence of a Ramsey equilibrium with endogenous labor supply and borrowing constraints (2011)
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