We study the effects of envy (relative consumption concerns), drawing on evidence that preferences typically exhibit present bias. We employ a Ramseytype model with agents who differ in initial capital endowments and account for present-biased envy: agents are naive and care about how their...

This paper analyzes growth and wealth distribution in a simple AK model in which households are heterogeneous not only in time-preference but in intertemporal substitution. Contrary to the result without long-run growth, the most patient household does not always own the entire capital in an...