Utility from Bequeathing Savings or Utility from Accumulating in the Ramsey Growth Model

23 Pages Posted: 25 Nov 2014

Date Written: November 23, 2014

Abstract

Despite ‘joy of giving models’ have been extensively examined in the literature, the Ramsey growth model has never been explored under the assumption of a direct preference for bequeathing savings that are reinvested. This assumption implies a Utility function depending on both consumption and savings, which may also be motivated as one that captures a direct preference for thriftiness or wealth accumulation arguably involved. The resulting growth model generalizes those accounting for the capitalist spirit as Zou (1994), and shows that the restrictive standard one is perhaps not the actual optimized version of the Solow model.

Keywords: Bequest, joy-of-giving, Ramsey growth model, Spirit of capitalism, optimal control, altruism

JEL Classification: O41, E21, D91

Suggested Citation

Khelifi, Atef, Utility from Bequeathing Savings or Utility from Accumulating in the Ramsey Growth Model (November 23, 2014). Available at SSRN: https://ssrn.com/abstract=2529759 or http://dx.doi.org/10.2139/ssrn.2529759

Atef Khelifi (Contact Author)

ECONETRIX Consulting ( email )

Paris
Villeneuve-le-roi
Paris, 94290
France

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