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The Two Sector Ramsey Model

  • Terry L. Roe
  • D. Şirin Saracoğlu
  • Rodney B.W. Smith
Chapter

Abstract

This chapter presents the two-sector neoclassical growth model where the transition path of consumption and saving is determined by households optimizing over time, and where firms interact in a competitive market environment. The single sector version of this model can be traced to Ramsey(1928), and its refinements by Cass (1965) and Koopmans (1965). King and Rebelo (1993) study, numerically, the transitional dynamics of the model which they confront to several stylized factors of economic growth. Barro and Sala-i-Martin (2004) also provide a full treatment of the single sector model.

Keywords

Service Sector Wage Rate Capital Stock Supply Function Transition Path 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag New York 2010

Authors and Affiliations

  • Terry L. Roe
    • 1
  • D. Şirin Saracoğlu
    • 2
  • Rodney B.W. Smith
    • 1
  1. 1.Department of Applied EconomicsUniversity of MinnesotaSt. PaulUSA
  2. 2.Department of EconomicsMiddle East Technical University (METU)AnkaraTurkey

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