Journal article
Strategic Intergenerational Bequests with Stochastic Convex Production
Economic theory, Vol.8(2), pp.367-376
08/01/1996
DOI: 10.1007/BF01211823
Abstract
This note reconsiders the well-known model of strategic bequest/altruistic growth, but with stochastic production satisfying a strong convexity condition: The probability that the next stock exceeds any given level is concave in investment. Existence of a Markov-stationary equilibrium consumption schedule, which is continuous and with all slopes in [0, 1], is established. Under smooth data and interiority assumptions, this schedule is differentiable, and marginal consumption is in (0, 1). This property allows for a rigorous and straightforward treatment of the equilibrium characterization problem.
Details
- Title: Subtitle
- Strategic Intergenerational Bequests with Stochastic Convex Production
- Creators
- Rabah Amir - WZB Berlin Social Science Center
- Resource Type
- Journal article
- Publication Details
- Economic theory, Vol.8(2), pp.367-376
- Publisher
- Springer-Verlag
- DOI
- 10.1007/BF01211823
- ISSN
- 0938-2259
- eISSN
- 1432-0479
- Language
- English
- Date published
- 08/01/1996
- Academic Unit
- Economics
- Record Identifier
- 9984380555802771
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