ENDOGENOUS GROWTH WITH NON-REPRODUCIBLE FACTOR AND QUASI-HYPERBOLIC DISCOUNTING
Abstract
This paper investigates how quasi-hyperbolic discounting affects the economic growth rate in Rebelo’s linear endogenous growth model with non-reproducible factors in an infinite discrete-time setting. The main results are as follows. First, a quasi-hyperbolic economy generally has a lower growth rate than an exponential economy. Second, an investment subsidy can increase the growth rate of a quasi-hyperbolic economy, whereas a consumption tax has no effect on long-run growth. Third, the paper derives a closed-form expression for the subsidy rate that restores the growth rate to the exponential benchmark.
Fields of Study & Subjects
Economic theories and models
Publication details
- Journal / source
- The Singapore Economic Review
- Publisher
- World Scientific Pub Co Pte Ltd
- Pages
- 1–30
- Publication date
- 13 May 2026
- Language
- EN