Desire For Wealth Accumulation And Economic

In this paper,I bring wealth utility into Romer's endogenous growth model,and define a parameter called "wealth accumulation desire" to reflect people's willingness to accumulate wealth.I find a balanced growth path in the model,and use comparative static analysis to examine the impact of wealth accumulation desire on economic variables such as the longrun economic growth rate.I find that the stronger the desire for wealth accumulation,the lower the equilibrium interest rate;the stronger the desire for wealth accumulation,the higher the national savings rate;the stronger the desire for wealth accumulation,the smaller the ratio of consumption to capital and the higher the level of capital stock on the balanced growth path.In addition,the stronger the desire for wealth accumulation,the more human capital is allocated into the R&D department and the higher the level of knowledge stock on the balanced growth path,and then the higher the longrun economic growth rate.By comparing with the model in a central planner economy,I find that the impact of wealth accumulation desire on a country's long-term growth is mainly achieved by affecting the allocation of human capital.When human capital can be freely distributed by the market,the stronger the desire for wealth accumulation,the more human capital is allocated into the R&D department,and thus the higher the long-term economic growth rate.In this paper I also analyze the factors that may lead to differences in the desire for wealth accumulation between countries.I think that the wealth security and the social status of the rich have an important influence on the wealth accumulation desire of a country's citizens.Wealth security requires the state to provide a stable social environment and a sound private property protection system.A stable social environment requires no danger of war and turmoil in the foreseeable future,and citizens have normal ways to accumulate wealth.For countries in a peaceful and stable environment,the difference in the protection of private property determines the difference in the people's wealth security.As for the social status,there are many factors,such as wealth,power,education,occupation,and so on.The social status of the rich people actually reflects the general view of the public about the wealth pursuit.When the social status of the rich group is in line with their economic strength,it will inspire people's desire to accumulate wealth and promote economic development.