Wealth Maximization Hypothesis: Accumulated Knowledge Approach

The theoretical foundations of Wealth Maximization Hypothesis. A static approach allows to show how, according to this hypothesis, workers decide about labor and consumption. Specifically this hypothesis states that workes maximize their net income subject to an embodied technology in order to produ...

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Autores:: Junca Rodríguez, Gustavo Adolfo

Tipo de recurso:: Doctoral thesis

Fecha de publicación:: 2016

Institución:: Universidad Nacional de Colombia

Repositorio:: Universidad Nacional de Colombia

Idioma:: spa

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Summary:	The theoretical foundations of Wealth Maximization Hypothesis. A static approach allows to show how, according to this hypothesis, workers decide about labor and consumption. Specifically this hypothesis states that workes maximize their net income subject to an embodied technology in order to produce productive labor, in which human capital as accumulated knowledge play a key role. This fact allows deriving optimal decisions concerning labor suppy and consumption demand. Wealth Maximization Hypothesis is introduced in a Von Neumann General Equilibrium. Two main results are reached. The first one is that according to Von Neumann Economy, in which the model is extended so that workers maximize their wealth in order to close de model on consumption and labor supply, there is a price vector that permits workers and firms to maximize their net income and that permites to all markets to be cleared. In addition, this equilibrium solution is consistent with usual macroeconomic constraints, that is, the aggregate demand and aggregate supply for a close economy. This also implies a classical result under perfect competition so that full employment implies that aggregate investment is equal to aggregate savings. The second one, according to this Von Neumann Economy referes to the fact that income and wealth distribution are endogenous and emerge from optimal worker decisions under Wealth Maximization Hypothesis. A wealth maximization hypothesis in a natural dynamic framework. There, a review of human capital decisions at individual level is presented and this neoclassical framework is compared with our approach, in which we characterize optimal human capital accumulation and investment decisions. Finally, this research explains how optimal individual decisions about heterogeneous productive labor supply explain endogenous economic growth.

Wealth Maximization Hypothesis: Accumulated Knowledge Approach

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