Hostname: page-component-78c5997874-j824f Total loading time: 0 Render date: 2024-11-19T03:07:29.675Z Has data issue: false hasContentIssue false
  • English
  • Français

Ramsey's theory of National Saving: A Mathematician in Cambridge

Published online by Cambridge University Press:  11 June 2009

Marion Gaspard
Marion Gaspard
Affiliation:
GRESE, Maison des sciences économiques, Université Paris I Panthéon-Sorbonne, 106–112 Boulevard de l'Hopital, 75013 Paris, France.
Get access Rights & Permissions [Opens in a new window]

Extract

In the December 1928 issue of the Economic Journal, Frank Ramsey asked the question “how much of its income should a nation save?” Few of the Cambridge economists of the 1930s were convinced by his highly formalized answer. His contribution sank quickly into oblivion, remaining there for about thirty-five years. In the 1960s, the success of the Hamiltonian formalism and the increasing interest for optimal growth led on the contrary to a quasi “natural” use of Ramsey's former intuitions. These mathematical tools became so widespread that, a few years later, new classical macroeconomics uses a new interpretation of the “à la Ramsey” models, within the setting of representative agent models, in order to bypass the Arrow and Sonnenschein-Mantel-Debreu “impossibility results.” The “à la Ramsey” model is the backbone of modern new classical macroeconomics. It is thus not surprising that these successive moves in macro-economic theory came to foster a slanted interpretation of Ramsey's 1928 article. In this respect, Roger E. A. Farmer's point of view is representative of the retrospective tribute sometimes paid to Ramsey's article:

F. Ramsey was one of the first economists to study how an infinitely lived agent should allocate his resources over time. His work was at the forefront of mathematical economics at the time it was written but his approach has now become a standard part of graduate macroeconomic courses. Many applications of Ramsey's work assume that there is only one agent in the economy and that this representative agent can be thought of as a stand-in for the workings of the market mechanism (Farmer 1993, p. 77).

Type
Research Article
Information
Journal of the History of Economic Thought , Volume 25 , Issue 4 , December 2003 , pp. 413 - 435
Copyright
Copyright © The History of Economics Society 2003

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Blaug, Mark. 1962. Economic Theory in Retrospect. Cambridge: Cambridge University Press, 1978.Google Scholar
Blot, Joël and Michel, Philippe. “First-order Necessary Conditions for Infinite-Horizon Variational Problems.” Journal of Optimization Theory and Applications 88 (02): 349–64.Google Scholar
Cass, David. 1965. “Optimal Growth in an Aggregative Model of Capital Accumulation.” Review of Economic Studies 32 (07): 233–40.CrossRefGoogle Scholar
Collard, David. 1996. “Pigou and Future Generations: a Cambridge Tradition.” Cambridge Journal of Economics 20 (5): 585–97.CrossRefGoogle Scholar
Davis, John B. 1991. “Keynes' View of Economics as a Moral Science.” In Bateman, Bradley W. and Davis, John B., eds., Keynes and Philosophy, Essays on the Origin of Keynes' Thought. Aldershot, UK: Edward Elgar, pp. 89–103.Google Scholar
Edgeworth, Francis Ysidro. 1881. Mathematical Psychics. New York: Augustus M. Kelley Publishers, 1967.Google Scholar
Farmer, Roger. E. 1993. The Macroeconomics of Self-Fulfilling Prophecies. Cambridge, MA: MIT Press.Google Scholar
Gaspard, Marion. 2001. “Les démonstrations de la règle de Ramsey: les mathématiques comme self-control.” Revue économique 52 (05): 595–604.Google Scholar
Israel, Giorgio. 1996. La mathématisation du réel, essai sur la modélisation mathématique. Paris: Editions du Seuil.Google Scholar
Keynes, John Maynard. 1921. A Treatise on Probability. In Moggridge, Donald E. and Johnson, Elizabeth, eds., The Collected Writings of John Maynard Keynes, Vol. VIII. London: Macmillan and Cambridge University Press, 1973.Google Scholar
John Maynard, Keynes. 1930. “F. P. Ramsey.” The Economic Journal 40 (06). Reprinted in Essays in Biography, 1933. In Donald E. Moggridge and Elizabeth Johnson, eds., The Collected Writings of J. M. Keynes, Vol. X. London: Macmillan and Cambridge University Press, 1972, pp. 335–36.Google Scholar
Kurz, D. Heinz and Salvadori, Neri. 2001. “Sraffa and the Mathematicians: Frank Ramsey and Alister Watson.” In Cozzi, Terenzio and Marchionatti, Roberto, eds., Piero Sraffa's Political Economy: A Centenary Estimate. London and New York: Routledge, pp. 254–84.Google Scholar
Koopmans, Tjalling C. 1965. “On the Concept of Optimal Economic Growth.” In The Econometric Approach to Development Planning. Amsterdam: North Holland, pp. 225–300.Google Scholar
Mellor, D. Hugh. 1980. Prospect for Pragmatism: Essays in the Memory of F.P. Ramsey. Cambridge: Cambridge University Press.Google Scholar
Newbery, David M. 1987. “Ramsey Model.” The New Palgrave: A Dictionary of Economics, Vol 4. London: Macmillan, pp. 46–48.Google Scholar
O'Donnell, Roy. M. 1982. Keynes's Philosophy, Economics and Politics: The Philosophical Foundations of Keynes' Thought and their Influence on his Economics and Politics. London: Macmillan, 1989.Google Scholar
Pigou, Arthur Cecil. 1908. Economic Science in Relation to Practice. London: Macmillan.Google Scholar
Pigou, Arthur Cecil. 1920. The Economics of Welfare. London: Macmillan. 1952.Google Scholar
Pigou, Arthur Cecil. 1925. Memorials of Alfred Marshall. New York: Augustus M. Kelley, 1956.Google Scholar
Ramsey, Frank P. 1921. “The Rights and Wrongs of Doing Nothing to Improve the Lot of Fellow Men.” Papers for the Cambridge Discussion Society. In Ramsey, Frank P., Notes on Philosophy, Probability and Mathematics, edited by Galavotti, Maria C.. Naples, Italy: Bibliopolis-Edizioni di filosofia e scienze, 1991, pp. 291–95.Google Scholar
Ramsey, Frank P. 1923. “Socialism and Equality of Income.” Papers for the Cambridge Discussion Society. In Frank P. Ramsey, Notes on Philosophy, Probability and Mathematics, edited by Galavotti, Maria C.. Naples, Italy: Bibliopolis-Edizioni di filosofia e scienze, 1991, pp. 313–19.Google Scholar
Ramsey, Frank P. 1925. “The Foundations of Mathematics.” In Frank P. Ramsey, Philosophical Papers, edited by Mellor, Hugh D.. Cambridge: Cambridge University Press, 1990, pp. 164–224.Google Scholar
Ramsey, Frank P. 1926. “Truth and Probability.” In Frank P. Ramsey, Philosophical Papers, edited by Mellor, Hugh D.. Cambridge: Cambridge University Press, 1990, pp. 52–94.Google Scholar
Ramsey, Frank P. 1927a. “Facts and Propositions.” In Frank P. Ramsey, Philosophical Papers, edited by Mellor, Hugh D.. Cambridge: Cambridge University Press, 1990, pp. 34–51.Google Scholar
Ramsey, Frank P. 1927b. “A Contribution to the Theory of Taxation.” Economic Journal 37 (03): 47–61.CrossRefGoogle Scholar
Ramsey, Frank P. 1928. “A Mathematical Theory of Savings.” Economic Journal 38 (12): 543–59.Google Scholar
Ramsey, Frank P. 1929. “General Propositions and Causality.” In Frank Ramsey, Philosophical Papers, edited by Mellor, Hugh D.. Cambridge: Cambridge University Press, pp. 145–63.Google Scholar
Ramsey, Frank P. 1990. Philosophical Papers, edited by Mellor, Hugh D.. Cambridge: Cambridge University Press.Google Scholar
Ramsey, Frank P. 1991. Notes on Philosophy, Probability and Mathematics, edited by Galavotti, Maria C.. Naples, Italy: Bibliopolis-Edizioni di filosofia e scienze.Google Scholar
Raymond, Frank. 2000. “Establishing the Historical Foundations of Modern Growth Theory: An Inquiry into the Motivation and Methodology of F. P. Ramsey.” Faculty Research Working Paper Series, College of the Holy Cross, Worcester, MA.Google Scholar
Sahlin, Nils Erik. 1990. The Philosophy of F. P. Ramsey. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Shackle, George L. S. 1967. The Years of High Theory: Inventions and Tradition in Economic Thought, 1926–1939. Cambridge: Cambridge University Press.Google Scholar
Simon, Herbert A. 1986. “Rationality in Psychology and Economics.” In Hogarth, Robin M. and Reder, Melvin W., eds., Rational Choice, the Contrast between Economics and Psychology. Chicago: University of Chicago Press, pp. 25–40.Google Scholar
Spiegel, Henry W. 1971. The Growth of Economic Thought. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
Sraffa, Piero. 1960. Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge: Cambridge University Press.Google Scholar
Weintraub, E. Roy. 1974. General Equilibrium Theory. London: Macmillan, 1985.Google Scholar
Wittgenstein, Ludwig. 1922. Tractatus logico-philosophicus. German text with an English translation en regard by Ogden, C. K.. London and New York: Routledge, 1992.Google Scholar
Wulwick, Nancy. 1995. “The Hamiltonian Formalism and Optimal Growth Theory.” In Rima, Ingrid H., ed., Measurement, Quantification and Economic Analysis. London and New York: Routledge, pp. 406–35.Google Scholar