The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth
Data(s) |
10/03/2015
10/03/2015
01/08/2014
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Resumo |
Modern macroeconomic theory utilises optimal control techniques to model the maximisation of individual well-being using a lifetime utility function. Agents face choices over current and future consumption (with resultant implied savings decisions) seeking to maximise the present value of current plus future well-being. However, such inter-temporal welfare-maximising assumptions remain empirically untested. In the work presented here we test whether welfare was in (historical) fact maximised in the US between 1870-2000 and find empirical support for the optimising basis of growth theory, but only once a comprehensive view of what constitutes a country’s wealth or capital is taken into account. |
Identificador | |
Idioma(s) |
en |
Publicador |
University of Stirling |
Relação |
SIRE DISCUSSION PAPER;SIRE-DP-2015-01 |
Palavras-Chave | #inter-temporal utility maximisation #modern growth theory #US #comprehensive wealth |
Tipo |
Working Paper |