Optimal growth and impatience: A phase diagram analysis
In this paper we show that we can replace the assumption of constant discount rate in the one-sector optimal growth model with the assumption of decreasing marginal impatience without losing major properties of the model. In particular, we show that the steady state exists, is unique, and has a saddle-point property. All we need is to assume that the discount function is strictly decreasing, strictly convex and has a uniformly bounded first-derivative.
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Volume (Year): 5 (2009)
Issue (Month): 2 ()
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References listed on IDEAS
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- Drugeon, Jean-Pierre, 1996. "Impatience and long-run growth," Journal of Economic Dynamics and Control, Elsevier, vol. 20(1-3), pages 281-313.
- Das, Mausumi, 2003. "Optimal growth with decreasing marginal impatience," Journal of Economic Dynamics and Control, Elsevier, vol. 27(10), pages 1881-1898, August.
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