Finite lifetimes and growth

Larry E. Jones; Rodolfo E. Manuelli

doi:10.1016/0022-0531(92)90052-J

Finite lifetimes and growth

Larry E. Jones
, Rodolfo E. Manuelli

Research output: Contribution to journal › Article › peer-review

86 Scopus citations

Abstract

In this paper we study the long run growth property of overlapping generations models. It is shown that in one sector models with convex technologies the asymptotic growth rate must be zero. This results because the young do not have sufficient income to purchase a large capital stock. Thus, a policy of income redistribution to the young can generate growth even if financed by income taxation. Additionaly, it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth.

Original language	English
Pages (from-to)	171-197
Number of pages	27
Journal	Journal of Economic Theory
Volume	58
Issue number	2
DOIs	https://doi.org/10.1016/0022-0531(92)90052-J
State	Published - Dec 1992

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title = "Finite lifetimes and growth",

abstract = "In this paper we study the long run growth property of overlapping generations models. It is shown that in one sector models with convex technologies the asymptotic growth rate must be zero. This results because the young do not have sufficient income to purchase a large capital stock. Thus, a policy of income redistribution to the young can generate growth even if financed by income taxation. Additionaly, it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth.",

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AU - Manuelli, Rodolfo E.

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N2 - In this paper we study the long run growth property of overlapping generations models. It is shown that in one sector models with convex technologies the asymptotic growth rate must be zero. This results because the young do not have sufficient income to purchase a large capital stock. Thus, a policy of income redistribution to the young can generate growth even if financed by income taxation. Additionaly, it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth.

AB - In this paper we study the long run growth property of overlapping generations models. It is shown that in one sector models with convex technologies the asymptotic growth rate must be zero. This results because the young do not have sufficient income to purchase a large capital stock. Thus, a policy of income redistribution to the young can generate growth even if financed by income taxation. Additionaly, it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth.

UR - https://www.scopus.com/pages/publications/0000973020

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DO - 10.1016/0022-0531(92)90052-J

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SN - 0022-0531

VL - 58

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EP - 197

JO - Journal of Economic Theory

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IS - 2

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Finite lifetimes and growth

Abstract

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