The Impact Of Capital And Income Risk On Long-Run Growth
The paper analyzes the effects of individual--specific and economy--wide productivity shocks on intertemporal decision--making of risk averse agents. We focus especially on the consequences for long--run growth. By contrasting the most widely used models of modern growth theory, namely the AK-model and the learning by doing-model, it is shown that not only the degree of risk aversion but also the source of income as measured by the factor income distribution is crucial for the impact of the stochastic disturbances. In the presence of a pure capital risk, growth and welfare effects are different from those arising when agents are subject to capital and income risk.
|Date of creation:||05 Jul 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: +34 93 542 17 46
Web page: http://enginy.upf.es/SCE/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Clemens, Christiane & Soretz, Susanne, 1997. "Welfare Effects of Income Taxation in a Model of Stochastic Growth," Hannover Economic Papers (HEP) dp-210, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Maurice Obstfeld, 1992.
"Risk-Taking, Global Diversification, and Growth,"
NBER Working Papers
4093, National Bureau of Economic Research, Inc.
- Maurice Obstfeld, 1992. "Risk-taking, global diversification, and growth," Discussion Paper / Institute for Empirical Macroeconomics 61, Federal Reserve Bank of Minneapolis.
- Maurice Obstfeld., 1993. "Risk-Taking, Global Diversification, and Growth," Center for International and Development Economics Research (CIDER) Working Papers C93-016, University of California at Berkeley.
- Obstfeld, Maurice, 1992. "Risk-Taking, Global Diversification, and Growth," CEPR Discussion Papers 688, C.E.P.R. Discussion Papers.
- Weil, Philippe, 1990. "Nonexpected Utility in Macroeconomics," The Quarterly Journal of Economics, MIT Press, vol. 105(1), pages 29-42, February.
- Stephen Turnovsky, 1998.
"On the Role of Government in a Stochastically Growing Open Economy,"
Discussion Papers in Economics at the University of Washington
0073, Department of Economics at the University of Washington.
- Turnovsky, Stephen J., 1999. "On the role of government in a stochastically growing open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 23(5-6), pages 873-908, April.
- Stephen Turnovsky, 1998. "On the Role of Government in a Stochastically Growing Open Economy," Working Papers 0073, University of Washington, Department of Economics.
- Weil, Philippe, 1993. "Precautionary Savings and the Permanent Income Hypothesis," Review of Economic Studies, Wiley Blackwell, vol. 60(2), pages 367-83, April.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Maurice Obstfeld, 1995.
"Evaluating Risky Consumption Paths: The Role of Intertemporal Substitutability,"
NBER Technical Working Papers
0120, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1994. "Evaluating risky consumption paths: The role of intertemporal substitutability," European Economic Review, Elsevier, vol. 38(7), pages 1471-1486, August.
- Sandmo, Agnar, 1970. "The Effect of Uncertainty on Saving Decisions," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 353-60, July.
When requesting a correction, please mention this item's handle: RePEc:sce:scecf0:212. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.