Saddle-node bifurcations in an optimal growth model with preferences for wealth habit
Date
2014
Authors
Sağlam, Ç.
Turan, A.
Turan, H.
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Abstract
This paper studies the dynamic implications of preferences for wealth habit in a one-sector optimal growth model. We show that the dynamics may encounter saddle-node bifurcations with respect to the parameters of the preferences: the relative weight of wealth in utility and the degree of wealth habit. We analytically provide the monotone comparative statics and the continuity of the critical capital stock with respect to the discount factor, the relative weight of wealth in utility and the degree of wealth habit. © 2014 by Walter de Gruyter Berlin/Boston 2014.
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Studies in Nonlinear Dynamics and Econometrics
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Walter de Gruyter GmbH
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English