We take a differential game approach to assess the Ramsey growth model from the standpoint of the representative firm. We identify parametric conditions such that the economy cannot reach the Ramsey golden rule, due to the presence of a stable demand-driven equilibrium. This may happen under Bertrand and Cournot behaviour, as well as social planning. We show that a wave of horizontal mergers can indeed drive the economy towards the Ramsey golden rule.
Capital Accumulation, Mergers and the Ramsey Golden Rule / R. Cellini; L. Lambertini. - STAMPA. - (2007), pp. 487-505.
Capital Accumulation, Mergers and the Ramsey Golden Rule
LAMBERTINI, LUCA
2007
Abstract
We take a differential game approach to assess the Ramsey growth model from the standpoint of the representative firm. We identify parametric conditions such that the economy cannot reach the Ramsey golden rule, due to the presence of a stable demand-driven equilibrium. This may happen under Bertrand and Cournot behaviour, as well as social planning. We show that a wave of horizontal mergers can indeed drive the economy towards the Ramsey golden rule.File in questo prodotto:
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