Unbounded Growth with Heterogenous Consumers

This paper studies unbounded growth with infinite-horizon consumers whose discount factors and instant utility functions are not assumed to be identical. The Negishi-type planner becomes non-homogenous and as a consequence, different consumer types may end up holding all wealth in the far future for different initial distributions of income. The main technical contribution is a turnpike theorem which generalizes the global stability results of [Kaganovich, M., 1998. Sustained endogenous growth with decreasing returns and heterogenous capital. Journal of Economic Dynamics and Control 22, 1575-1603] and [Jensen, M.K., 2003. On the global stability of unbounded optimal growth models. Mimeo]. (c) 2006 Published by Elsevier B.V.