The Ramsey Model with Logitic Population Growth

7 Pages Posted: 7 Feb 2006

See all articles by Elvio Accinelli

Elvio Accinelli

Universidad Autonoma Metropolitana

Juan Gabriel Brida

Universidad de la Rep├║blica

Date Written: February 2006

Abstract

In standard economic growth theory it is assumed that labor force follows exponential growth, a not realistic assumption. As described in [4] the growth of natural populations is more accurately depicted by a logistic growth law. In this paper we analyze how the Ramsey growth model is affected by logistic growth of population, comparing it with the classic Ramsey model. We show that there is a unique nontrivial steady state of the model and that the parameters of the logistic equation play no role in determining long run equilibrium per worker level of consumption and capital. In addition, we study the stability of the model showing that its nontrivial equilibrium is is a saddle point.

Keywords: Ramsey model, population growth, logistic equation

JEL Classification: C62, O41

Suggested Citation

Accinelli, Elvio and Brida, Juan Gabriel, The Ramsey Model with Logitic Population Growth (February 2006). Available at SSRN: https://ssrn.com/abstract=881518 or http://dx.doi.org/10.2139/ssrn.881518

Elvio Accinelli

Universidad Autonoma Metropolitana ( email )

Calzada del Hueso 1100
Coyoacan
Mexico
Mexico

Juan Gabriel Brida

Universidad de la Rep├║blica ( email )

Av. 18 de Julio
Montevideo, 1968
Uruguay

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