Strategic intergenerational bequests with stochastic convex production
AbstractThis note reconsiders the well-known model of strategic bequest* altruistic growth, but with stochastic production satisfying a strong convexity condition: The probability that the next stock exceeds any given level is concave in investment. Existence of a Markov-stationary equilibrium consumption schedule, which is continuous and with all slopes in [0, 1], is established. Under smooth data and interiority assumptions, this schedule is differentiable, and marginal consumption is in (0, 1). This property allows for a rigorous and straightforward treatment of the equilibrium characterization problem.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 8 (1996)
Issue (Month): 2 ()
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Amir, Rabah, 1996. "Strategic Intergenerational Bequests with Stochastic Convex Production," Economic Theory, Springer, vol. 8(2), pages 367-76, August.
- AMIR , Rabah, 1994. "Strategic Intergenerational Bequests with Stochastic Convex Production," CORE Discussion Papers 1994025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- Woźny, Łukasz & Growiec, Jakub, 2008.
"Intergenerational interactions in human capital accumulation,"
10308, University Library of Munich, Germany.
- Wozny Lukasz & Growiec Jakub, 2012. "Intergenerational Interactions in Human Capital Accumulation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-47, June.
- Jakub Growiec & Lukasz Wozny, 2010. "Intergenerational interactions in human capital accumulation," National Bank of Poland Working Papers 71, National Bank of Poland, Economic Institute.
- Balbus, Łukasz & Reffett, Kevin & Woźny, Łukasz, 2012. "Stationary Markovian equilibrium in altruistic stochastic OLG models with limited commitment," Journal of Mathematical Economics, Elsevier, vol. 48(2), pages 115-132.
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