Non-constant discounting and Ak-type growth models

Francisco Cabo, Guiomar Martin-Herran and María Pilar Martínez-García

Economics Letters, 2015, vol. 131, issue C, 54-58

Abstract: This paper analyzes an Ak-type endogenous growth model under non-constant discounting, assuming both naïve and sophisticated consumers. For both types of consumers an isoelastic utility with an intertemporal elasticity below one guarantees observational equivalence under exponential and non-constant discounting, but rejects strong equivalence (identical overall impatience does not lead to identical growth rates). Further, polices aimed at increasing productivity of the economy are less growth-enhancing than typically predicted by the literature with exponential discounting.

Keywords: Non-constant discounting; Endogenous growth; Time-consistent and time-inconsistent solutions (search for similar items in EconPapers)
JEL-codes: C61 D91 O40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016517651500141X
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecolet:v:131:y:2015:i:c:p:54-58

DOI: 10.1016/j.econlet.2015.03.040

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().