Time Preference and Long-Run Growth: the Role of Patience Capital
AbstractThis paper studies the relation between long-term economic growth and time preference of households in the context of a simple model of endogenous growth. We assume that the rate of time preference depends on the level of household's patience (stock of patience capital). It is assumed that the patience capital is accumulated by household's future-oriented investment and decumulated by consumption activities. The paper focuses on how the level of patience capital is determined in the balanced-growth equilibrium.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 4 ()
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Endogenous time preference; Becker-Mulligan hypothesis; Endogenous growth;
Find related papers by JEL classification:
- D9 - Microeconomics - - Intertemporal Choice
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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- Erol, Selman & Le Van, Cuong & Saglam, Cagri, 2011.
"Existence, optimality and dynamics of equilibria with endogenous time preference,"
Journal of Mathematical Economics,
Elsevier, vol. 47(2), pages 170-179, March.
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- Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 729-58, August.
- Palivos, Theodore & Wang, Ping & Zhang, Jianbo, 1997. "On the Existence of Balanced Growth Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 205-24, February.
- Meng, Qinglai, 2006. "Impatience and equilibrium indeterminacy," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2671-2692, December.
- Michael Stern, 2006. "Endogenous time preference and optimal growth," Economic Theory, Springer, vol. 29(1), pages 49-70, September.
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