We address the fundamental issues of existence and efficiency of an
equilibrium in a Ramsey model with many agents, where agents have
heterogenous discounting, elastic labor supply and face borrowing constraints.
The existence of rational bubbles is also tackled. In the first
part, we prove the equilibrium existence in a truncated bounded economy
through a fixed-point argument by Gale and Mas-Colell (1975). This equilibrium
is also an equilibrium of any unbounded economy with the same
fundamentals. The proof of existence is eventually given for an infinitehorizon
economy as a limit of a sequence of truncated economies. Our
general approach is suitable for applications to other models with different
market imperfections. In the second part, we show the impossibility
of bubbles in a productive economy and we give sufficient conditions for
equilibrium efficiency.