Optimal Economic growth with recursive preferences: decreasing rate of time preference
AbstractIn the field of optimal growth theory, since Ramsey's time it is frequent to maximize a welfare function consisting of the discounted sum of instantaneous utilities. Such an optimality criterion implies that preferences are independent over time. Following in the tradition of Irwing Fisher, Koopmans presented postulates for recursive preferences for which the rate of time preference is variable. In a later study with Beals he showed that the implications are that even in the simplest situations described by the neoclassical growth model initial conditions affect the long run optimal path. These authors assumed a quasiconcave welfare function. In the present essay their analysis is extended to the case of a discounted sum of instantaneous utilities when the discount rate decreases as consumption increases, and the welfare function need not be concave.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Chile, Department of Economics in its journal Estudios de Economia.
Volume (Year): 25 (1998)
Issue (Month): 2 Year 1998 (December)
Economic growth; recursive preferences.;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Chakrabarty Debajyoti, 2012.
"Poverty Traps and Growth in a Model of Endogenous Time Preference,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 12(1), pages 1-35, July.
- Chakrabarty, Debajyoti, 2002. "Poverty traps and growth in a model of endogenous time preference," ZEI Working Papers B 27-2002, ZEI - Center for European Integration Studies, University of Bonn.
- Debajyoti Chakrabarty, 2000. "Poverty traps and Growth in a model of Endogenous Time Preference," Departmental Working Papers 200018, Rutgers University, Department of Economics.
- repec:hal:journl:halshs-00639731 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Verónica Kunze).
If references are entirely missing, you can add them using this form.