Endogenous discount rate and elasticity of the marginal utility of consumption

Using an endogenous growth model where the discount rate is a function of consumption, we show that the condition in which the elasticity of the marginal utility of consumption is greater than 1 ensures, at the same time, the existence of an unique saddle point equilibrium and the maximization of capital and consumption.

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Year of publication:	2012
Authors:	Vita, Giuseppe Di
Published in:	Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 19.2012, 7, p. 665-669
Publisher:	Taylor & Francis Journals

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010548725