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Utility from bequeathing savings or Utility from accumulating in the Ramsey growth model

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  • Khelifi, Atef

Abstract

Despite ‘joy of giving models’ have been extensively examined in the literature, the Ramsey growth model has never been explored under the assumption of a direct preference for bequeathing savings that are reinvested. This assumption implies a Utility function depending on both consumption and savings, which may also be motivated as one that captures a direct preference for thriftiness or wealth accumulation arguably involved. The resulting growth model generalizes those accounting for the capitalist spirit as Zou (1994), and shows that the restrictive standard one is perhaps not the actual optimized version of the Solow model. (JEL O41, E21, D91).

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  • Khelifi, Atef, 2014. "Utility from bequeathing savings or Utility from accumulating in the Ramsey growth model," MPRA Paper 60125, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60125
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    File URL: https://mpra.ub.uni-muenchen.de/60125/1/MPRA_paper_60125.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Ramsey model; Optimal Growth; Optimal control; Savings decision; bequest; joy-of-giving;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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