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Title: |
Endogenous Time Preference and Endogenous
Growth |
| Author: |
Zee, Howell H. |
| Author
Affiliation: |
IMF |
| Source: |
International Economic Journal, Summer 1997, v. 11, no. 2, pp. 1-20 |
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Publication Date: |
Summer 1997 |
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Abstract: |
This paper develops a one-sector aggregate
endogenous growth model with intertemporal preference dependence. The
resultant model possesses the fundamental property of growth
convergence, in the sense that countries with identical parameters
regarding technology, preference, and government policy will converge to
a steady state with the same (positive) growth rate. A notable policy
implication of the model is that, even in the absence of externalities,
the growth effects of an income tax are shown to be a priori ambiguous
and dependent on the relative magnitudes of the tax rate and the tax
elasticity of the savings rate. |
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