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Heterogeneity in social values and capital accumulation in a changing world

  • Pierre Gosselin
  • Aïleen Lotz
  • Marc Wambst
Regular Article

Abstract

In a society characterized by a multitude of heterogeneous agents and a large number of possibly immaterial goods, each one having distinct social and personal values, we study the impact of these relative values on intergenerational capital accumulation, as a function of economic and social parameters such as capital mobility, productivity and personal and social values discrepancies. Each agent is modelled by a one-period production function and a two-period intertemporal utility. Agents live, produce and consume over one period, but optimize over two periods, so providing a remaining stock of goods for the next generation. This creates a dynamics in capital accumulation depending on social and individual values. A threshold appears in capital stock accumulation that depends on personal and social values’ volatilities, and below which the initial stock will be depleted. Whereas volatility in social values increases the threshold, impairing capital accumulation, adverse shocks in goods’ values may reverse the dynamics of the accumulation process. Finally, capital mobility specifically favors forerunners, but capital accumulation in one or several sectors may shift social values in their direction, at the expense of other sectors.

Keywords

Capital accumulation Disaggregated capital Take-off Threshold effect Intergenerational models Cambridge capital controversy 

JEL Classification

E22 O10 O30 O40 

Notes

Acknowledgements

The authors would like to thank two anonymous referees and the editorial board for their careful reviews and constructive comments. All errors remain ours.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Institut Fourier, UMR 5582 CNRS-UJFUniversité Grenoble AlpesSt Martin d’HèresFrance
  2. 2.Cerca TrovaGrenoble Cedex 1France
  3. 3.IRMA, UMR 7501 CNRSUniversité de StrasbourgStrasbourg CedexFrance

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