Endogenous discounting via wealth, twin-peaks and the role of technology

Ingmar Schumacher

No 2006104, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The article gives new answers to the two following questions: One, what can be a potential source of the twin-peaks of economic growth? Two, why were some of the countries that were believed to belong to the group of low steady state countries (like Taiwan, South Korea, Japan, etc.) able to reach a convergence path which led them to a high steady state? We endogenize the time preference rate via a broad measure of wealth and provide empirical evidence that wealth affects the discount rate negatively. We provide sufficient conditions for multiplicity of equilibria and demonstrate how endogenous discounting via wealth leads to the twin-peaks of economic growth. We prove that improvements in technology can help avoid the Twin-Peaks.

Keywords: endogenous time preference; recursive utility; twin-peaks of economic growth (search for similar items in EconPapers)
JEL-codes: C61 D90 O41 (search for similar items in EconPapers)
Date: 2006-11
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Endogenous discounting via wealth, twin-peaks and the role of technology (2009)
Working Paper: Endogenous discounting via wealth, Twin-Peaks and the role of technology (2009)
Working Paper: Endogenous Discounting via Wealth, Twin-Peaks and the Role of Technology (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2006104

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