Optimal Economic growth with recursive preferences: decreasing rate of time preference
In 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.
Volume (Year): 25 (1998)
Issue (Month): 2 Year 1998 (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:25:y:1998:i:2:p:161-178. 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.