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On the neoclassical growth model with non-constant discounting

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  • Hiraguchi, Ryoji

Abstract

We study the neoclassical growth model with non-constant discounting. We do not assume specific functional forms for discounting and demonstrate that the competitive economy always performs better than the planning economy.

Suggested Citation

  • Hiraguchi, Ryoji, 2014. "On the neoclassical growth model with non-constant discounting," Economics Letters, Elsevier, vol. 125(2), pages 175-178.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:2:p:175-178
    DOI: 10.1016/j.econlet.2014.08.029
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    References listed on IDEAS

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    1. R. A. Pollak, 1968. "Consistent Planning," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(2), pages 201-208.
    2. Krusell, Per & Kuruscu, Burhanettin & Smith, Anthony Jr., 2002. "Equilibrium Welfare and Government Policy with Quasi-geometric Discounting," Journal of Economic Theory, Elsevier, vol. 105(1), pages 42-72, July.
    3. Karp, Larry, 2007. "Non-constant discounting in continuous time," Journal of Economic Theory, Elsevier, vol. 132(1), pages 557-568, January.
    4. Charles M. Harvey, 1986. "Value Functions for Infinite-Period Planning," Management Science, INFORMS, vol. 32(9), pages 1123-1139, September.
    5. Mohammed Abdellaoui & ArthurE. Attema & Han Bleichrodt, 2010. "Intertemporal Tradeoffs for Gains and Losses: An Experimental Measurement of Discounted Utility," Economic Journal, Royal Economic Society, vol. 120(545), pages 845-866, June.
    6. Robert J. Barro, 1999. "Ramsey Meets Laibson in the Neoclassical Growth Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1125-1152.
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    Citations

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    Cited by:

    1. Marín-Solano, Jesús, 2015. "Group inefficiency in a common property resource game with asymmetric players," Economics Letters, Elsevier, vol. 136(C), pages 214-217.
    2. Ryoji Ohdoi & Koichi Futagami & Takeo Hori, 2015. "Welfare and Tax Policies in a Neoclassical Growth Model with Non-unitary Discounting," Discussion Papers in Economics and Business 15-14, Osaka University, Graduate School of Economics.
    3. Francisco Cabo & Guiomar Martín-Herrán & María Pilar Martínez-García, 2020. "Non-constant Discounting, Social Welfare and Endogenous Growth with Pollution Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 369-403, July.
    4. Nesje, Frikk, 2020. "Cross-dynastic Intergenerational Altruism," Working Papers 0678, University of Heidelberg, Department of Economics.
    5. Maeda, Daiki, 2018. "Quasi-geometric discounting in cash-in-advance economy," Journal of Mathematical Economics, Elsevier, vol. 79(C), pages 51-56.
    6. Nesje, Frikk, 2020. "Cross-dynastic Intergenerational Altruism," Working Papers 0678, University of Heidelberg, Department of Economics.
    7. Terrence Iverson & Larry Karp, 2021. "Carbon Taxes and Climate Commitment with Non-constant Time Preference," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 764-799.
    8. Ryoji Ohdoi & Koichi Futagami, 2021. "Welfare implications of non-unitary time discounting," Theory and Decision, Springer, vol. 90(1), pages 85-115, February.

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    More about this item

    Keywords

    Neoclassical growth; Non-constant discounting; Time-consistency;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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