Aggregate savings under quasi-hyperbolic versus exponential discounting

Minwook Kang

Economics Letters, 2021, vol. 207, issue C

Abstract: Using a measure of patience proposed by Myerson et al. (2001) and Caliendo and Findley (2014), this paper compares aggregate savings between exponential and quasi-hyperbolic discounters in two different models of economies: (1) the economy with linear technology and stochastic productivity shock and (2) a deterministic neoclassical growth model developed by Laibson (1997). This paper shows that intertemporal elasticity of substitution and growth rates have important roles in determining equilibrium savings of the two discounters.

Keywords: Quasi-hyperbolic discounting; Exponential discounting; Consumption-savings decision; Overall (im)patience; Neoclassical growth model (search for similar items in EconPapers)
JEL-codes: D15 E21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:207:y:2021:i:c:s0165176521002834

DOI: 10.1016/j.econlet.2021.110006

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