The Ramsey Model with Logitic Population Growth

Elvio Accinelli, Juan Gabriel Brida
2006 Social Science Research Network  
In standard economic growth theory it is assumed that labor force follows exponential growth, a not realistic assumption. As described in Maynard Smith (1974), 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
more » ... quation 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 a saddle point.
doi:10.2139/ssrn.881518 fatcat:dmsrddgsk5gzfnru4uuzbo4wfq