Economic Growth in a Two-Agent Economy
AbstractThis paper presents a two-agent economy, in which each agent has a consumption-dependent time preference. The optimal dynamic paths of accumulation will tend to one of many possible steady states, depending on the location of the initial capital level. One of the main results of this model arises in comparison with single-agent models. More precisely, one possible instance of the model consists of a case in which the two agents are such that without interaction one would become “rich” and the other “poor”. However, since they share a single production unit, a potential poverty trap may become averted.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c014_043.
Length: 26 pages
Date of creation: Jun 2009
Date of revision:
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