Economic Growth and Welfare in a Simple Neoclassical OLG Model with Minimum Wage and Consumption Taxes support
In this paper we show that the neoclassical standard OLG growth model, under low substitution in preferences and technology, may generate three stable steady states. In particular we show the richness of the dynamical roles played by the intertemporal substitution parameter. The novelty of our work is that a three stable equilibria world may exist, which allows to reinterpret in a new light the evidence of three groups of countries: underdeveloped, developing and developed. Our theoretical results may have far-reaching implications on the debate on convergence, on the corresponding growth empirics and on the policies for escaping from poverty traps.
|Date of creation:||01 Jan 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Via Cosimo Ridolfi, 10 - 56124 PISA|
Phone: +39 050 22 16 466
Fax: +39 050 22 16 384
Web page: http://www.ec.unipi.it
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pie:dsedps:2007/67. 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: ()
If references are entirely missing, you can add them using this form.