Heterogeneous Agents, Distribution and Growth

Lloyd Paquin

Cahiers de recherche from Université Laval - Département d'économique

Abstract:

We modify the Uzawa-Lucas representative agent model of endogenous economic growth to allow for a variety of differences among households: differences in their tastes, in their human capital production technologies, and in their initial endowments. Some differences are incompatible with the existence of a steady- state equilibrium, while others have no effect upon the steady-state growth rate. However, a variety of differences give rise to inequalities in the distribution of income and to variations in the steady-state rate of growth. Furthermore, a redistributive tax and transfer policy can have a significant impact upon the steady-state level of investment in human capital and, thus, upon the rate of economic growth.

Keywords: Uzawa-Lucas; Endogenous growth; Heterogenous agents; Steady state; Agent characteristics and Growth; Redistribution and Growth (search for similar items in EconPapers)
JEL-codes: O15 O41 (search for similar items in EconPapers)
Date: 1999
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:laeccr:9913

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