Aggregate savings under quasi-hyperbolic versus exponential discounting

초록

Using a measure of patience proposed by Myerson et al. (2001) and Caliendo and Findley (2014), this paper compares aggregate savings between exponential and quasi-hyperbolic discounters in two different models of economies: (1) the economy with linear technology and stochastic productivity shock and (2) a deterministic neoclassical growth model developed by Laibson (1997). This paper shows that intertemporal elasticity of substitution and growth rates have important roles in determining equilibrium savings of the two discounters. (C) 2021 Elsevier B.V. All rights reserved.

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