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Prospect theory has found an increasing attention in many fields of economics. However, it has scarcely been addressed in a macroeconomic growth model. In an earlier paper we introduced prospect theory into a stochastic growth model. This paper focuses on linking the Euler equation induced by...
Persistent link: https://www.econbiz.de/10005858781
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This paper examines numerically the impact of a negative exogenousshock to marginal productivity (such as ecological government regulationthat becomes eective at some point in time) in an endogenousnite time growth model with sluggish reallocation of human capital.The policy can be anticipated...
Persistent link: https://www.econbiz.de/10005869073
This paper studies the Cass-Koopmans-Ramsey model of optimal economic growth in the presence of loss aversion and habit formation. The representative agent's preferences for consumption can be gradually varied between the standard constant intertemporal elasticity of substitution (CIES) case and...
Persistent link: https://www.econbiz.de/10010316035
This paper studies the Cass-Koopmans-Ramsey model of optimal economic growth with a representative agent whose preferences for consumption can be gradually varied between the standard CES case and Kahneman and Tversky's prospect utility. The numerical analysis of a specific parametrization shows...
Persistent link: https://www.econbiz.de/10005858780
Prospect theory has been the focus of increasing attention in many Fields of economics. However, it has scarcely been addressed in macro-economic growth models - neither on theoretical nor on empirical grounds. In this paper we use prospect theory in a stochastic optimal growth model....
Persistent link: https://www.econbiz.de/10005091282
This paper examines, numerically, the impact of a <em>negative</em> exogenous shock to marginal productivity (such as ecological government regulation that becomes effective at some point in time) in an endogenous finite time growth model with sluggish reallocation of human capital. The policy can be...
Persistent link: https://www.econbiz.de/10005246298
Prospect theory has been the focus of increasing attention in many fields of economics. However, it has scarcely been addressed in macroeconomic growth models--neither on theoretical nor on empirical grounds. In this paper we use prospect theory in a stochastic optimal growth model. Thereafter,...
Persistent link: https://www.econbiz.de/10005259647
Persistent link: https://www.econbiz.de/10008113445