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Time Preference and Long-Run Growth: the Role of Patience Capital

Author

Listed:
  • Taketo Kawagishi

    (Graduate School of Economics, Kyoto University)

  • Kazuo Mino

    (Institute of Economic Research, Kyoto University)

Abstract
This paper studies the relation between long-term economic growth and time preference of households in the context of a simple model of endogenous growth. We assume that the rate of time preference depends on the level of household's patience (stock of patience capital). It is assumed that the patience capital is accumulated by household's future-oriented investment and decumulated by consumption activities. The paper focuses on how the level of patience capital is determined in the balanced-growth equilibrium.

Suggested Citation

  • Taketo Kawagishi & Kazuo Mino, 2012. "Time Preference and Long-Run Growth: the Role of Patience Capital," Economics Bulletin, AccessEcon, vol. 32(4), pages 3243-3249.
    • Handle: RePEc:ebl:ecbull:eb-12-00276
    as

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    References listed on IDEAS

    as
    1. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
    2. Erol, Selman & Le Van, Cuong & Saglam, Cagri, 2011. "Existence, optimality and dynamics of equilibria with endogenous time preference," Journal of Mathematical Economics, Elsevier, vol. 47(2), pages 170-179, March.
    3. Meng, Qinglai, 2006. "Impatience and equilibrium indeterminacy," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2671-2692, December.
    4. Michael Stern, 2006. "Endogenous time preference and optimal growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 49-70, September.
    5. Strulik, Holger, 2012. "Patience and prosperity," Journal of Economic Theory, Elsevier, vol. 147(1), pages 336-352.
    6. Yasuhiro Nakamoto, 2009. "Consumption externalities with endogenous time preference," Journal of Economics, Springer, vol. 96(1), pages 41-62, January.
    7. Palivos, Theodore & Wang, Ping & Zhang, Jianbo, 1997. "On the Existence of Balanced Growth Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 205-224, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Endogenous time preference; Becker-Mulligan hypothesis; Endogenous growth;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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