Life Cycle Savings, Bequest, and the Diminishing Impact of Scale on Growth

Carl-Johan Dalgaard and Martin Jensen

No 07-17, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: There appears to be ample evidence that the size of population acted as a stimulus to growth in historical times; scale mattered. In the post World War II era, however, there is little evidence of such scale effects on growth. Where did the scale effect go? The present paper shows that the savings motive critically affects the size and sign of scale effects in standard endogenous growth models. If the bequest motive dominates, the scale effect is positive. If the life cycle motive dominates, the scale effect is ambiguous and may be negative. A declining importance of bequest in capital accumulation could therefore be one reason why scale seems to matter less today than in historical times.

Keywords: overlapping generations; endogenous growth; scale effects (search for similar items in EconPapers)
JEL-codes: O41 O57 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2007-08
New Economics Papers: this item is included in nep-dev and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.econ.ku.dk/english/research/publications/wp/2007/0717.pdf/ (application/pdf)

Related works:
Journal Article: Life-cycle savings, bequest, and a diminishing impact of scale on growth (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:0717

Access Statistics for this paper

More papers in Discussion Papers from University of Copenhagen. Department of Economics Oester Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann ().