How do you compare the Ramsey-Cass-Koopmans model with other dynamic general equilibrium models?

The Solow-Swan model is all about long-term economic growth driven by capital accumulation, labor, and technology. It’s a bit simpler and assumes a constant savings rate. On the other hand, the Ramsey-Cass-Koopmans model dives deeper with dynamic optimization, where households make consumption and savings decisions to maximize their utility over time. This model allows for varying savings rates based on preferences and productivity shocks. Essentially, while Solow-Swan gives a solid foundational view, Ramsey-Cass-Koopmans offers a more nuanced, behavior-driven approach.

The OLG model introduces multiple generations of agents who live, work, and save over different periods, unlike the representative agent in Ramsey-Cass-Koopmans. This allows the OLG model to capture intergenerational transfers and the effects of policies like social security on savings and capital accumulation. While the Ramsey-Cass-Koopmans model focuses on optimal savings and consumption decisions of infinitely-lived agents, the OLG model provides a richer framework for analyzing demographic changes and their impact on the economy.

The Overlapping Generations (OLG) model highlights how policies from the 44th and 46th presidents, such as healthcare reforms and minimum wage increases, have had a negative impact on both the overall economy and future generations. Obama's Affordable Care Act raised costs, and Biden's continued expansions and support for higher wages could lead to long-term consequences, such as higher taxes and reduced benefits for younger generations. These policies influence savings, investment behaviors, and income distribution, demonstrating that their effects are not just short-term but have lasting implications on economic stability.

The Ramsey-Cass-Koopmans model is great for showing how optimal savings and consumption evolve over time, with growth driven by capital accumulation. But, the Endogenous Growth model kicks it up a notch by explaining how policies, innovation, and knowledge spillovers can drive sustained growth from within the economy itself. Instead of just relying on external tech improvements, it focuses on how investments in human capital, R&D, and technology can lead to continuous growth. Basically, while Ramsey-Cass-Koopmans is about optimal choices given certain conditions, Endogenous Growth digs into how growth can be generated and sustained internally.

Human capital and learning by doing should be mentioned. The OLG model colapses to the RCK when the number of periods tends to be infinite and older generations leave bequests.

Perhaps it is a good idea to conceptualise the sources and mechanisms of economic growth more systematically. Let's assume that economic growth originates from the continuous expansion and deepening of human productive capacity (HPC), and HPC can be defined and measured in different spatial-temporal contexts. Then the afore-mentioned theories represent specifically contextualised representation of the sources and mechanisms of growth: those expansions and deepening of HPC that arise exogenously from the economic system, and those emerge and evolve endogenously. Moreover, such sources and mechanisms are heterogeneous: some will permeate the whole economic system, whilst others have locally confined impacts.

Negative policies, particularly those that impact human capital and economic incentives, can have long-term detrimental effects on the economy. In the OLG model, when short-sighted policies fail to support sustainable growth, the consequences are felt across multiple generations. The model converges to the RCK model when periods extend infinitely, showing that poor policy decisions can lead to diminished wealth transfer, reduced investment in human capital, and weakened economic stability over the long term. These effects underscore the importance of thoughtful, forward-looking policy-making to avoid lasting economic harm.