Summary
This paper studies the role of impatience in a model with recursively defined preferences. A method is introduced whereby the rate of impatience can be parametrically adjusted for a given aggregator. Using lattice programming and Topkis' Theorem (1978) sufficient conditions are discovered to guarantee that a reduction in the rate of impatience will lead to greater capital stocks in every period.
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I would like to thank my advisor John H. Boyd III for his encouragement at several steps along the way. I would also like to thank P. Dutta, Raghu Sundaram and William Thompson for several helpful suggestions. Finally, I have benefited tremendously from the advice of an anonymous referee. This article reflects the views of the author and does not necessarily reflect the views of the Federal Trade Commission or any individual Commissioner.
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Hertzendorf, M.N. Recursive utility and the rate of impatience. Econ Theory 5, 51–65 (1995). https://doi.org/10.1007/BF01213644
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DOI: https://doi.org/10.1007/BF01213644