Poverty traps and growth in a model of endogenous time preference
We introduce endogenous probability of survival in the Keynes-Ramsey optimal growth model. An individual�s probability of survival is assumed to be dependent on past levels of consumption. Endogenous probability of survival implies that the rate of time preference (or degree of patience) of an individual is endogenously determined. We solve the dynamic optimization problem facing an agent and provide a complete characterization of the steady states and their stability properties. We find that...[Show more]
|Collections||ANU Research Publications|
|Source:||The BE Journal of Macroeconomics|
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