Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5054050 | Economic Modelling | 2014 | 8 Pages |
Abstract
This paper introduces time preference which depends on private investment for patience along the lines of Becker and Mulligan (1997) into a one-sector AK model. Assuming that time preference also hinges on the social level of such investment and that of consumption, we show that multiple balanced growth path (BGP henceforth) equilibria can exist, and provide the conditions for multiple BGP equilibria. Furthermore, we clarify that the equilibrium path is indeterminate in the high-growth BGP equilibrium, while it is determinate in the low-growth BGP equilibrium. We also discuss the effect of a subsidy policy to private investment for patience on an endogenous growth rate.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Taketo Kawagishi,