Caballé, Jordi (contributor); … - 2001 - [Elektronische Ressource]
, the rate of economic
growth must increase.
4
Note that, if we had assumed that γ < 0, the instantaneous utility function … habits makes the intertemporal elasticity of
substitution larger and this accelerates economic growth as the ratio of present … > 1 throughout the rest of
the paper.
Concerning the properties of the BGP, note that the stationary rate x of economic …