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KOEN VERMEYLEN
THE NEOCLASSICAL GROWTH
MODEL
AND RICARDIAN EQUIVALENCE
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Neoclassical Growth Model and Ricardian Equivalence Contents
Contents
1. Introduction 3
2. The neoclassical growth model 4
3. The steady state 9
4. Ricardian equivalence 11
5. Conclusions 12
Appendix A 13
A1. The maximization problem of the representative fi rm 13
A2. The equilibrium value of the representative fi rm 15
A3. The goverment’s intertemporal budget constraint 15
A4. The representative household’s intertemporal budget constraint 16
A5. The maximization problem of the representative household 18
A6. The consumption level of the representative household 18
Appendix B 19
References 21
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