The dynamics of wealth inequality under endogenous fertility: A remark on the Barro-Becker model with heterogenous endowments
AbstractSeveral contributions have already pointed out that initial wealth in- equalities do persist in the long run in the Ramsey model with heteroge- nous agents. We show that this result is not robust to the introduction of endogenous fertility. Our argument builds on the Barro-Becker (1989) seminal model extended to allow for heterogenous agents with dierent capital endowments. Strikingly enough, individual consumption levels, fertility rates and capital stocks are shown to be equalized after only one adjustment period. This property is shown to hold irrespective of the production sector specication.
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Date of creation: 16 Jul 2010
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endogenous fertility; heterogeneous households; optimal growth;
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