Endogenous Discounting via Wealth, Twin-Peaks and the Role of Technology

Ingmar Schumacher

No 2006059, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: The articles gives new answers to the following questions : One, what can be potential source of the twin-peaks of economi 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)
Pages: 18
Date: 2006-11-01
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/2006-59.pdf (application/pdf)

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)
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:ctl:louvec:2006059

Access Statistics for this paper

More papers in Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().