Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92633
Authors: 
Hirose, Ken-ichi
Ikeda, Shinsuke
Year of Publication: 
2001
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 536
Abstract: 
In the theory of endogenous time preference, one of the most common and most controversial assumptions is that the degree of impatience, measured by the rate of time preference, is increasing in wealth. Although this empirically-unjustified assumption often helps ease dynamic analyses by ensuring stability, it has never been discussed why decreasing impatience is theoretically problematic. We first show that under certain conditions there exists no optimal solution when impatience is decreasing. By considering problem-proof, well-behaved models, we examine implications of decreasing impatience for three issues that have been discussed in the literature: (i) long-run tax incidence of capital taxation; (ii) the effect of inflation on growth; and (iii) wealth distribution dynamics in the two-country world.
Subjects: 
decreasing impatience
time preference
capital taxation
the Tobin effect
wealth distribution
JEL: 
D90
E00
F41
Document Type: 
Working Paper

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