The Ramsey Model in Discrete Time and Decreasing Population Growth Rate

Download or read book The Ramsey Model in Discrete Time and Decreasing Population Growth Rate written by Juan Gabriel Brida and published by . This book was released on 2014 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper extends the Ramsey-Cass-Koopmans growth model of optimal capital accumulation in discrete time by introducing a generic population growth law that satisfies the following properties: population is strictly increasing and bounded, and the population growth rate is decreasing to zero as time tends to infinity. We show that the optimization problem admits a unique solution that can be characterized by the Euler equation. A closed-form solution of the model is presented for the case of a Cobb-Douglas production function and a logarithmic utility function. In contrast to the original model, the solution is not always monotone.