Research On A Set Of Deterministic And Stochastic Economic Growth Models

In this paper, we discuss two types of economic growth models——deterministic growth models and stochastic growth models.First, a Uzawa-Lucas model with leisure is presented. By the method of dynamic optimization, when making leisure exogenous, a three dimensions dynamic system is gained, it is saddle-path steady. It can be seen that leisure is negatively related to the balanced economic growth rate, output-capital, consumption-capital and interest rate; it is positively related to the balanced wage rate. However, when endogenous leisure is considered, a four dimensions dynamic system is gained, its stabilization index is two; the steady growth rate will be zero; in this case, the optimal leisure time is determined; it can be seen that the optimal leisure time is negatively related to the discount rate and capital depreciation rate; it is positively related to the efficiency of education devotion. Second, we add wealth embodying social status to the consumer's utility function in a stochastic economic growth model with productive government expenditure. By the method of dynamic optimization, under the circumstance of government not issuing bonds, we derive the consumption-wealth ratio, the mean growth rate of economic and welfare; and examine the effects of social status, income taxation and stochastic shocks on economic growth, consumption-wealth ratio and welfare. At the same time, we demonstrate the implication of social status for fiscal policies. Under the circumstance of government issuing bonds, we derive the mean growth rate of economic, the consumption-wealth ratio, the portfolio shares and welfare. We examine the effects of social status, fiscal policy, stochastic shocks and government expenditure share on economic growth and the consumption-wealth ratio. The research shows that the desire for social status affects economic growth, consumer savings behavior and fiscal policies.