Endogenous time preference and infrastructure-led growth with an unexpected numerical example

Kei Hosoya ()
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Kei Hosoya: Kokugakuin University

Portuguese Economic Journal, 2024, vol. 23, issue 1, No 2, 3-32

Abstract: Abstract This paper shows the construction of a growth model that includes public infrastructure and a related externality and investigates the dynamic properties of the model for a specific endogenous time preference function. After suggesting a saddle-path stability for long-term equilibrium under an endogenous time preference, numerical analysis of the model then reveals an unexpected relation between the strength of the externality, the magnitude of the rate of time preference, and the growth rate of the economy. In addition, it is found that multiple equilibria are unlikely to be supported empirically by the model in this paper.

Keywords: Endogenous time preference; Public infrastructure; Capital-deepening externality; Numerical analysis (search for similar items in EconPapers)
JEL-codes: C61 H54 O40 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10258-022-00230-1

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