The Neoclassical Growth Model

In this short discussion, the author builds on the neoclassical growth model as developed by Frank Ramsey in 1928, which formulates its conclusions within continuous time. This text presents a new neoclassical model, one which exists within discrete time and does not consider population growth. The author uses detailed formulas and calculations to also illustrate Ricardian Equivalence, an economic theory which suggests that the government can finance spending with either public debt or tax increase, as market demand and spending will remain the same in either case.


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