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Heterogeneous EIS and Wealth Distribution in a Neoclassical Growth Model

Nakamoto, Yasuhiro (2015): Heterogeneous EIS and Wealth Distribution in a Neoclassical Growth Model.

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Abstract

We introduce the heterogeneities of EIS (elasticities of intertemporal substitution) into the Ramsey version of macrodynamic model with a finite number of agents. The assumption that the degrees of EIS differ among agents means that our economy has various growth rate of private consumption. Then, our contributions are as follows. First, we analytically characterize the steady-state levels of individual capital. Second, we analytically examine the role of heterogeneous EIS for the wealth inequality. Finally, we give numerical examples to see the complicated dynamic motion and the steady-state characterization of wealth inequality.

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