Utility from Bequeathing Savings or Utility from Accumulating in the Ramsey Growth Model

Despite ‘joy of giving models ’ have been extensively examined in the literature, the Ramsey growth model has never been explored under the assumption of a direct preference for bequeathing savings that are reinvested. This assumption implies a Utility function depending on both consumption and savings, which may also be motivated as one that captures a direct preference for thriftiness or wealth accumulation arguably involved. The resulting growth model generalizes those accounting for the capitalist spirit as Zou (1994), and shows that the restrictive standard one is perhaps not the actual optimized version of the Solow model. (JEL O41, E21, D91) “The difficulty lies not in the new ideas, but in escaping the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.” J.M.Keynes, New York 1987. It goes to our mind almost systematically, that the flow of saving should never be included in the Utility function along with consumption, to solve the inter-temporal maximization problem of the consumer. Two reasons can be stated precisely and ma