Carroll, Christopher D.; Overland, Jody R.; Weil, David N. - 2021
to capital. In an endogenous growth model with standard preferences, there will be no effect on the saving rate or the … growth rate of output. In both of the models that we consider, however, saving and growth will temporarily fall in response … to the shock. The initial decline in saving and growth will be larger in the inward-looking case. However, since agents …