Should the Neoclassical growth model include the saving flow in the Utility function?

Atef Khelifi ()

MPRA Paper from University Library of Munich, Germany

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)

Keywords: Bequest; Capitalist Spirit; Ramsey Growth model; Savings; Joy-of-giving; Optimal control theory (search for similar items in EconPapers)
JEL-codes: D0 D91 E0 E00 E21 O41 (search for similar items in EconPapers)
Date: 2014-11-15
New Economics Papers: this item is included in nep-gro, nep-mac and nep-upt
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Related works:
Working Paper: Should the Neoclassical growth model include the saving flow in the Utility function? (2016)
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