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 inferiority 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 (August)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Rabah Amir, 1996. "Strategic intergenerational bequests with stochastic convex production," Economic Theory, Springer, vol. 8(2), pages 367-376.
- 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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- Wozny Lukasz & Growiec Jakub, 2012.
"Intergenerational Interactions in Human Capital Accumulation,"
The B.E. Journal of Theoretical Economics,
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- Balbus, Łukasz & Reffett, Kevin & Woźny, Łukasz, 2013. "A constructive geometrical approach to the uniqueness of Markov stationary equilibrium in stochastic games of intergenerational altruism," Journal of Economic Dynamics and Control, Elsevier, vol. 37(5), pages 1019-1039.
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- Łukasz Balbus & Kevin Reffett & Łukasz Woźny, 2013. "Markov Stationary Equilibria in Stochastic Supermodular Games with Imperfect Private and Public Information," Dynamic Games and Applications, Springer, vol. 3(2), pages 187-206, June.
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