"Hyperbolic" discounting: A recursive formulation and an application to economic growth

Tarek Coury, Chetan Dave

Research output: Contribution to journalArticlepeer-review

Abstract

We axiomatize decreasing impatience (DI) in a discrete-time setting, as originally discussed by Prelec, and formulate a class of recursively-defined discounting functions that conform to DI. The recursive formulation is used to analyze the Ramsey growth problem using dynamic programming techniques.

Original languageEnglish (US)
Pages (from-to)193-196
Number of pages4
JournalEconomics Letters
Volume109
Issue number3
DOIs
StatePublished - Dec 2010

Keywords

  • Decreasing impatience
  • Economic growth
  • Hyperbolic discounting
  • Markov perfect equilibrium
  • Quasi-hyperbolic discounting

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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