Application of Mean Field Games to Growth Theory
Lasry, Jean-Michel; Lions, Pierre-Louis; Guéant, Olivier (2008), Application of Mean Field Games to Growth Theory. https://basepub.dauphine.fr/handle/123456789/3071
TypeDocument de travail / Working paper
External document linkhttp://hal.archives-ouvertes.fr/hal-00348376/en/
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Abstract (EN)This article discusses the interaction between economic growth in the sense of human capital accumulation and the dynamics of inequalities. We use a mean-field game framework in which individuals improve their human capital both to improve their wages and to avoid potential competition with less skilled individuals. Our contribution is twofold. First, we exhibit a mechanism in which competition between a continuum of people regarding human capital accumulation lead to growth. Second, our model highlights the importance of Pareto distributions to describe inequalities since power laws appear naturally as explicit solutions of our problem.
Subjects / KeywordsMean-field Models
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