A Note on Environment-Dependent Time Preferences

Chu, Hsun; Lai, Ching Chong; Liao, Chih Hsing

doi:10.1017/s1365100514000960

Cited by 7 publications

(2 citation statements)

References 57 publications

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“…3 To name a few, Bian and Meng (2004) and Meng (2006) show indeterminacy can happen if the time preference depends on social consumption and/or social income. Chu, Lai, and Liao (2016) examine the growth effect of environmental taxes when time preference is affected by environmental quality. 4 Our paper differs from this literature in two aspects.…”

Section: Introductionmentioning

confidence: 99%

Self‐fulfilling patience

Gong

Wang

2020

Australian Economic Papers

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This paper explores macroeconomic implications of investment in patience in a standard neoclassical growth model with Becker-Mulligan endogenous time preferences. The endogenous discount rate acts as a new margin for inter-temporal decisions, in addition to the standard margin that hinges on the marginal return of capital. This time preference margin alters the equilibrium dynamics and stability of the neoclassical growth model substantially. When the discount rate is positive, there may exist multiple steady states that are either saddle-point stable or unstable. When the discount rate is negative, the unique steady state is locally indeterminate due to self-fulfilling patience investment. Interestingly, the existence of the local indeterminacy does not need any externality. When the discount rate is zero, various types of bifurcations can happen, leading to rich equilibrium dynamics such as limit cycles and chaos. We show that opening up the closed economy can cause aggregate instability.

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Section: Introductionmentioning

confidence: 99%

Self‐fulfilling patience

Gong

Wang

2020

Australian Economic Papers

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“… For studies in this literature see, for example, Bovenberg and Smulders (), Mohtadi (), Smulders and Gradus (), Bovenberg and De Mooij (), Grimaud (), Nakada (), Itaya (), Fullerton and Kim (), Barman and Gupta (), Ayong Le Kama, Pommeret, and Prieur (), Chu and Lai (), Chu, Lai, and Liao (), among others. …”

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confidence: 99%

Growth, intergenerational welfare, and environmental policies in an overlapping generations economy

Chu

Cheng

Lai

2017

Review Development Economics

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This paper examines the effects of the environmental tax on long-run growth and intergenerational welfare in a discrete-time overlapping generations (OLG) model. We highlight that the role regarding how the environmental tax revenues are distributed between the young or old generations has important implications for the growth and welfare effects. Our results indicate that raising the environmental tax can exert different effects on the environmental utility of the existing young and old generations, implying an intergenerational welfare conflict of the environmental policy. However, if tax revenues are distributed appropriately, our numerical simulation shows that it is possible for a higher environmental tax to improve the welfare of all generations. wileyonlinelibrary.com/journal/rode Rev Dev Econ. 2018;22:844-861.

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The Effects of Patience in a Growth Model with Infrastructure and a Related Externality

Hosoya

2023

New Frontiers in Regional Science: Asian Perspectives

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A Note on Environment-Dependent Time Preferences

Cited by 7 publications

References 57 publications

Self‐fulfilling patience

Self‐fulfilling patience

Growth, intergenerational welfare, and environmental policies in an overlapping generations economy

The Effects of Patience in a Growth Model with Infrastructure and a Related Externality

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