IDEAS home Printed from https://ideas.repec.org/a/sae/reorpe/v35y2003i1p3-17.html
   My bibliography  Save this article

Golden Age versus Golden Rule: Capitalists versus Workers in Growth Theory

Author

Listed:
  • Frank Thompson

    (Department of Economics, University of Michigan)

Abstract

Golden Age steady states determined by saving rates maximizing profit are contrasted with the Golden Rule, that is, consumption maximizing, steady states highlighted in standard economic growth theory. Golden Rule steady states exemplify the classical socialist principle of distribution: to each according to work. Under the Golden Rule, consumption equals labor income, and given stationary class capital ownership shares, all profit must be invested and none consumed. In contrast, in Golden Age steady states, some profit can be freed for consumption, although the levels of investment, output, and most notably consumption are then all lower. These relationships are explored in models initially without, and then with, labor force growth and technical change.

Suggested Citation

  • Frank Thompson, 2003. "Golden Age versus Golden Rule: Capitalists versus Workers in Growth Theory," Review of Radical Political Economics, Union for Radical Political Economics, vol. 35(1), pages 3-17, March.
  • Handle: RePEc:sae:reorpe:v:35:y:2003:i:1:p:3-17
    DOI: 10.1177/0486613402250173
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0486613402250173
    Download Restriction: no

    File URL: https://libkey.io/10.1177/0486613402250173?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Norman Loayza & Klaus Schmidt-Hebbel & Luis Servén, 2000. "What Drives Private Saving Across the World?," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 165-181, May.
    2. Loayza, Norman & Schmidt-Hebbel, Klaus & Serven, Luis, 2000. "What drives private saving around the world?," Policy Research Working Paper Series 2309, The World Bank.
    3. Frank Thompson, 1996. "Socializing the Surplus: A System of Life Estates," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(3), pages 83-91, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. A. J. Julius, 2005. "Overtakable capitalist growth paths," Macroeconomics 0501030, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baharumshah, Ahmad Zubaidi & Slesman, Ly & Wohar, Mark E., 2016. "Inflation, inflation uncertainty, and economic growth in emerging and developing countries: Panel data evidence," Economic Systems, Elsevier, vol. 40(4), pages 638-657.
    2. International Monetary Fund, 2014. "Republic of Poland: Selected Issues Paper," IMF Staff Country Reports 2014/174, International Monetary Fund.
    3. Aizenman, Joshua & Noy, Ilan, 2015. "Saving and the long shadow of macroeconomic shocks," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 147-159.
    4. Joshua Mwakujonga, 2015. "The Influence of Creditor Rights and Contract Enforcement on the Levels of Factor Financing," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 4(2), pages 85-91.
    5. Charles Yuji Horioka & Akiko Terada-Hagiwara, 2016. "The Impact of Pre-marital Sex Ratios on Household Saving in Two Asian Countries: The Competitive Saving Motive Revisited," ISER Discussion Paper 0975, Institute of Social and Economic Research, Osaka University.
    6. Ying Fan & Abdullah Yavas, 2020. "How Does Mortgage Debt Affect Household Consumption? Micro Evidence from China," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(1), pages 43-88, March.
    7. Ken Chamuva Shawa, 2016. "Drivers Of Private Saving In Sub-Saharan African Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(2), pages 77-110, June.
    8. Ahmed, S. Amer & Vargas Da Cruz,Marcio Jose & Quillin,Bryce Ramsey & Schellekens,Philip, 2016. "Demographic change and development : a global typology," Policy Research Working Paper Series 7893, The World Bank.
    9. Yann Algan & Xavier Ragot, 2005. "Monetary policy with heterogenous agents and credit constraints," PSE Working Papers halshs-00590565, HAL.
    10. Grigoli, Francesco & Herman, Alexander & Schmidt-Hebbel, Klaus, 2018. "Saving in the world," World Development, Elsevier, vol. 104(C), pages 257-270.
    11. M. Castro Campos & C. Kool & J. Muysken, 2013. "Cross-Country Private Saving Heterogeneity and Culture," De Economist, Springer, vol. 161(2), pages 101-120, June.
    12. Ricardo Bebczuk & Eduardo Cavallo, 2016. "Is business saving really none of our business?," Applied Economics, Taylor & Francis Journals, vol. 48(24), pages 2266-2284, May.
    13. Evangelos V. Dioikitopoulos & Stephen J. Turnovsky & Ronald Wendner, 2020. "Dynamic Status Effects, Savings, And Income Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(1), pages 351-382, February.
    14. Stijn Rocher & Michael Stierle, 2015. "Household saving rates in the EU: Why do they differ so much?," Working Papers 2015.01, International Network for Economic Research - INFER.
    15. Charles Yuji Horioka, 2021. "Is the selfish life-cycle model more applicable in Japan and, if so, why? A literature survey," Review of Economics of the Household, Springer, vol. 19(1), pages 157-187, March.
    16. Anthony J. Makin, 2010. "How Should Macroeconomic Policy Respond to Foreign Financial Crises?," Economic Papers, The Economic Society of Australia, vol. 29(2), pages 99-108, June.
    17. repec:wbk:wboper:22034 is not listed on IDEAS
    18. El Mekkaoui de Freitas, Najat & Oliveira Martins, Joaquim, 2014. "Health, pension benefits and longevity: How they affect household savings?," The Journal of the Economics of Ageing, Elsevier, vol. 3(C), pages 21-28.
    19. World Bank & International Monetary Fund, 2016. "Global Monitoring Report 2015/2016," World Bank Publications - Books, The World Bank Group, number 22547.
    20. Charles Yuji Horioka & Akiko Terada-Hagiwara, 2017. "The impact of sex ratios before marriage on household saving in two Asian countries: The competitive saving motive revisited," Review of Economics of the Household, Springer, vol. 15(3), pages 739-757, September.
    21. Andrés Fernández & Ayşe İmrohoroğlu & Cesar E. Tamayo, 2019. "Saving Rates in Latin America: A Neoclassical Perspective," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(4), pages 791-823, December.

    More about this item

    Keywords

    economic growth; distribution;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:reorpe:v:35:y:2003:i:1:p:3-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.urpe.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.