Poverty traps and growth in a model of endogenous time preference

Arbeitspapier

We study the effect of endogenous time preference in a simple neo-classical model of growth. The variation of time preference causes the economy to have multiple steady states, some of which are similar to poverty traps. The stability properties of these steady states are analyzed. The results are interpreted in light of the growth experiences of developing economies. The model can explain why two economies that have identical production technologies and identical preferences may converge to different levels of income depending on initial conditions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEI Working Paper ; No. B 27-2002

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Macroeconomics: Consumption; Saving; Wealth ; Existence and Stability Conditions of Equilibrium ; Economic Growth and Aggregate Productivity: General
• Subject: Intertemporal choice ; Saving ; Growth ; Local stability ; Poverty traps ; Zeitpräferenz ; Wachstumstheorie ; Armut ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chakrabarty, Debajyoti
• Event: Veröffentlichung
• (who): Rheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI)
• (where): Bonn
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/39509
• Last update: 10.03.2025, 11:44 AM CET