Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260210 
Authors: 
Year of Publication: 
2017
Series/Report no.: 
Working Paper No. 2017:1
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
Using a standard model where the individual consumption path is computed solving an optimal control problem, we investigate central claims of Piketty (2014) Rather than r>g (confirmed in the data) r-s>g - with s being the rate of time preference - matters. If this condition holds and the elasticity of substitution in the production function is larger than one, the capital share converges to one in the long run. Nevertheless, this does not have major impact on the distribution of wealth. The latter, however, converges to maximum inequality for heterogeneous time preferences or rates of interest (either persistent or stochastic).
Subjects: 
wealth inequality
optimal control path
dynamic efficiency
JEL: 
C63
D31
E21
Document Type: 
Working Paper

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