SFB 303 Discussion Paper No. A - 497
Author: Corneo, Giacomo, and Olivier Jeanne
Title: Status-Seeking Can Generate Long-Run Growth in the Solow-Cass Model
Abstract: A desire for social status may lead individuals to care about their
relative wealth. We prove that the presence of a desire for status, even if
very limited, can generate endogenous growth in the Solow-Cass model. Hence
status-seeking my be seen as an engine of economic growth. When the
status-seeking motive is small, long-run growth only appears if the initial
stock of capital is large enough, i.e. the long-term behavior of the economy
depends on its initial conditions.
Keywords: long-run growth, capital accumulation, status-seeking behavior
JEL-Classification-Number: O40, O41
Creation-Date: November 1995
Unfortunately this paper is not available online. Please contact us to order a hardcopy.
SFB 303 Homepage