Why the rich get richer and the poor get poorer
The usual procedure in the field of optimal growth consists in maximizing a (discounted or not) sum of instantaneous utilities, called welfare. Such an optimality criterion implies that preferences are independent over time. Following in the tradition of Irwing Fisher, Koopmans presented an alternative for the case of discrete time periods; he used an assumption of limited non-complementarity over time, and showed that there exist welfare functions for which the rate of time preference is variable. Later he and others 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. Equivalent results for the case of continuous time have been reached by the present author. A similar approach by Uzawa reaches different results due to his particular assumptions; his optimal paths are, in the long run, independent of initial wealth. Blanchard and Fischer have critizised Uzawa’s increasing rate of time prKeywords: Rich, Poor.
Volume (Year): 22 (1995)
Issue (Month): 2 Year 1995 (December)
|Contact details of provider:|| Web page: http://www.econ.uchile.cl/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:udc:esteco:v:22:y:1995:i:2:p:177-205. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Verónica Kunze)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.