Abstract
Infinite horizon neoclassical optimal accumulation theory is characterised by an analytical apparatus that now pervades several fields of theoretical analysis: capital theory, growth and value theory, macrodynamics, etc. In this context the equilibrium solutions take the form of saddle paths which are, therefore, unstable paths. The convergence of these solutions to the steady-state equilibrium is then ensured by imposing a transversality condition, that is, a condition which guarantees the optimality of the solution when time tends to infinity.
The material presented in this chapter is the result of a set of discussions stimulated by Pierangelo Garegnani on the meaning of the ‘transversality condition’ within optimal capital accumulation models. I am grateful to him for these discussions. In addition, I wish to thank Andrea Battinelli, Carlo Beretta, Marco Bramanti, Thomas Christiaans, Roberto Ciccone, Ferdinando Colombo, Saverio Fratini, Kazuhiro Kurose, Enrico Sergio Levrero, PierCarlo Nicola, Fabio Petri, Mario Pomini, Giorgio Rodano, Neri Salvadori, Alessandro Sbuelz, Paolo Trabucchi, Gerd Weinrich and an anonymous referee for their comments and suggestions on earlier versions of this work. However, responsibility for what is written here is entirely mine. Finally, I am grateful to Micaela Tavasani for revising the English.
Universita Cattolica del Sacro Cuore, Largo Gemelli 1, 20123, Milano, Italy; e-mail: enrico.bellino@unicatt.it.
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© 2013 Enrico Bellino
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Bellino, E. (2013). On the Stability of the Ramsey Accumulation Path. In: Levrero, E.S., Palumbo, A., Stirati, A. (eds) Sraffa and the Reconstruction of Economic Theory: Volume One. Palgrave Macmillan, London. https://doi.org/10.1057/9781137316837_5
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DOI: https://doi.org/10.1057/9781137316837_5
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