Abstract
In standard infinite-horizon optimizing models of balanced growth, aggregate savings are positively related to private rates of return on investment or, for a given technology, to the share of accumulated factors of production in aggregate income. A relationship of opposite sign may however obtain in overlapping-generations (OLG) models, where higher rates of return on older agents' wealth imply lower disposable income for young laborers with high saving propensity. This paper explores such issues in the context of a continuous-time OLG model, deriving simple parametric restrictions conductive to results of either type and discussing how infinite-horizon results may carry over to OLG settings.
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