Growth and Distribution in a Model with Endogenous Time Peferences and Borrowing Constraints

Kirill Borissov

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: This paper proposes an AK-model with endogenous time preferences and borrowing constraints. It is assumed that the subjective discount factor of a household is an increasing function of its relative income. First we describe the structure of balanced-growth equilibrium paths, on which the population splits into two groups ? the rich and the poor. Then we study sliding equilibrium paths. They become balanced from some time onwards and eventually all the capital is owned by the household that is the richest at the initial state. Finally, we consider time consistent equilibrium paths and prove their existence.

Keywords: AK-model; Income Distribution; Endogenous Time Preferences (search for similar items in EconPapers)
JEL-codes: D90 O41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2011-09
New Economics Papers: this item is included in nep-dge
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Journal Article: Growth and distribution in a model with endogenous time preferences and borrowing constraints (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:deg:conpap:c016_073

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