Talk:Ramsey growth model

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This is only a start. I plan on expanding it/organizing it shortly.radek 03:53, 11 April 2006 (UTC)

As Solow growth model was created later than Ramsey's, shouldn't it be something like Solow GM is similar to Ramsey GM, not the other way around? AdamSmithee 08:33, 9 August 2006 (UTC)

Actually it should yes... MartinDK 13:21, 9 August 2006 (UTC)

Right, I rephrased it AdamSmithee 13:26, 9 August 2006 (UTC)

Hello.

Why the consumption elevated to aversion risk coefficient is reduced by one. I have the D.Romer book and it is not reduced by one. I have understood, that the equation is (c^(o-1))/(1-o) o= aversion risk coefficient . What is the use , of letting it by (c^(o-1)-1)/(1-o), why c-1?, c is an absolute variable, not a coefficient. Matias

It doesn't matter since utility is meant to be ordinal. When you take the derivative you get the same thing which is what's important. In general the 1 is included so that when you take the limit o-->infinity you get the log utility function. Without the 1 it doesn't work. So it doesn't matter but I believe with the 1 it's more precise. Romer's being a little bit sloppy.radek 18:56, 24 October 2006 (UTC)