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Weak Scale Effects in Overlapping Generations Economy

Author

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  • Gilad Sorek

    (Economics Department Auburn University)

  • Bharat Diwakar

    (Auburn University)

Abstract

We show how the two alternative saving motives - life-cycle consumption smoothing and parental bequests - determine the relation between population growth and R&D-based economic growth, i.e. the sign of the weak scale effect. We take a textbook R&D-based growth model of inÂ…finitely lived agents with no life-cycle saving motive and re-analyze it in the Overlapping Generations (OLG) framework, which incorporates both life-cycle and bequest saving motives. We decompose the effect of each saving motive on the sign of the weak scale effect and show that in the presence of both saving motives it is ambiguous in general.

Suggested Citation

  • Gilad Sorek & Bharat Diwakar, 2017. "Weak Scale Effects in Overlapping Generations Economy," Economics Bulletin, AccessEcon, vol. 37(2), pages 962-969.
  • Handle: RePEc:ebl:ecbull:eb-17-00036
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    More about this item

    Keywords

    R&D-based Growth; Weak Scale-Effects; Bequests; OLG;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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