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Effects of Wariness on Economic Growth in Overlapping Generations Models

Author

Listed:
  • Hai-Ha Pham

    (HCMIU - Ho Chi Minh City International University [Vietnam National University, HCM] - VNU-HCM - Vietnam National University, Ho Chi Minh City / Đại học Quốc gia TP. Hồ Chí Minh)

  • Ngoc-Sang Pham

    (EM Normandie Business School, Métis Lab)

Abstract

We introduce the notion of wariness in overlapping generations models and explore its effects on economic growth. In an exogenous growth model, under standard assumptions, we prove that the capital stock converges to a steady state. We then explore conditions under which this steady state is increasing (or decreasing) in the wariness level. We also provide a necessary and sufficient condition for the dynamic efficiency of the intertemporal equilibrium. In an endogenous growth model à la Romer (1986), we show that the growth rate of capital stock per capita in the economy with wariness is lower (higher, respectively) than that in the economy without wariness if and only if the capital return is high (low, respectively).

Suggested Citation

  • Hai-Ha Pham & Ngoc-Sang Pham, 2024. "Effects of Wariness on Economic Growth in Overlapping Generations Models," Working Papers hal-04453981, HAL.
    • Handle: RePEc:hal:wpaper:hal-04453981
    Note: View the original document on HAL open archive server: https://hal.science/hal-04453981
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