Inequality and Aggregate Savings in the Neoclassical Growth Model

Within the context of the neoclassical growth model I investigate the implications
of (initial) endowment inequality when the rich have a higher marginal savings rate than the poor. More unequal societies grow faster in the transition process, and therefore exhibit a higher speed of convergence. Furthermore, there is divergence in consumption and lifetime wealth if the rich exhibit a higher intertemporal elasticity of substitution.