Inequality and Aggregate Savings in the Neoclassical Growth Model
Type
working paper
Date Issued
2011
Author(s)
Abstract
Within the context of the neoclassical growth model I investigate the implications of (initial) endowment inequality when the rich have a higher marginal savings rate than the poor. More unequal societies grow faster in the transition process, and therefore exhibit a higher speed of convergence. Furthermore, there is divergence in consumption and lifetime wealth if the rich exhibit a higher intertemporal elasticity of substitution. Unlike the Solow-Stiglitz model, the steady state is always unique although the consumption function is concave.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
No
Publisher
CEPR
Subject(s)
Eprints ID
234866
File(s)![Thumbnail Image]()
open.access
Name
Foellmi2011_Inequality_Aggregate Savings.pdf
Size
216.53 KB
Format
Adobe PDF
Checksum (MD5)
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