Foellmi, Reto (August 2010). Inequality and Aggregate Savings in the Neoclassical Growth Model (Discussion Papers 10-11). Bern: Department of Economics
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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.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Föllmi, Reto |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
Discussion Papers |
Publisher: |
Department of Economics |
Language: |
English |
Submitter: |
Lars Tschannen |
Date Deposited: |
15 Oct 2020 17:09 |
Last Modified: |
05 Dec 2022 15:39 |
JEL Classification: |
O40, D30, O10 |
BORIS DOI: |
10.7892/boris.145733 |
URI: |
https://boris.unibe.ch/id/eprint/145733 |
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