Balanced-growth-consistent recursive utility and heterogeneous agents

✍ Scribed by Michael Ben-Gad

• Publisher: Elsevier Science
• Year: 1998
• Tongue: English
• Weight: 74 KB
• Volume: 23
• Category: Article
• ISSN: 0165-1889
• DOI: 10.1016/s0165-1889(98)00005-0

✦ Synopsis

The replacement of time-additive separability with recursive utility greatly expands the opportunity to incorporate heterogenous agents within Ramsey optimal growth models. Dolmas has demonstrated that there exists a class of aggregator functions that are consistent with balanced growth paths. This paper demonstrates that the restrictions imposed on the aggregator functions and on preferences to ensure the existence of steady-state balanced growth will also imply that capital allocations are indeterminate.