On the Ramsey Equilibrium with Heterogeneous Consumers
نویسندگان
چکیده
In this paper we address the question of deterministic cycles in a Ramsey model with heterogeneous in nite-lived agents and borrowing constraints, augmented to take into account the case of elastic labor supply. Under usual restrictions, not only we show that the steady state is unique, but also we clarify its stability properties through a local analysis. We nd that, in many cases, the introduction of elastic labor supply promotes convergence by widening the range of parameters for saddle-path stability, and endogenous cycles can eventually disappear. These results are robustly illustrated by means of canonical examples in which consumers have separable, KPR or homogeneous preferences. JEL classi cation: C62, D30, E32.
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