Ramsey Model

Abstract

Frank Plumpton Ramsey died at the age of 26 after making brilliant contributions to philosophy mathematical logic, and, of course, economics. His two contributions to economics both appeared in the Economic Journal, then edited by J.M. Keynes. The first, ‘A Contribution to the Theory of Taxation’, published in March, 1927, laid the foundation for the modern theory of commodity taxation. The second, the subject of this entry, was ‘A Mathematical Theory of Saving’, published in December, 1928. Keynes, in his obituary notice published two months after Ramsey’s death, in the Economic Journal of March, 1930, described the latter as ‘one of the most remarkable contributions to mathematical economics ever made, both in respect of the intrinsic importance and difficulty of its subject, the power and elegance of the technical methods employed, and the clear purity of illumination with which the writer’s mind is felt by the reader to play about its subject’.