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In macroeconomics literature inspired by traditional economists, it is said that economic growth and more equal distribution in income, are two opposite targets since moving toward more equality of income, will reduce propensity to saving. Based on the optimum growths models, it seems that the highest levels of growth can happen in a system just when in allocating the resources among the generations the attention is more paid to the concept of justice. If in this process the attention is more paid to the present generation compared to the future ones, the available resources for the whole system will decrease and as a result the economic growth will be stabilized at far lower rates. The more economic justice means the higher rate for economic growth. In this paper we use an optimal growth theory for studying the mechanics of this regularity. Empirical calibration of the model to the Iranian economy reveals that if economic policy makers in a planning period via a scenario can decrease social time preference to a 5%, real per capita GDP, consumption, saving and per capita capital formation will increase by 6.5%, 2.2% and 42% respectively.

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Ramsey model is one of the most important basic models to study intertemporal resource allocation. This model is derived from microeconomic optimal principle so it has a key role in macroeconomics with micro foundations. Hence, in many economic researches it is considered as a reference theory. Application of this model in economy of Iran will provide an appropriate theorem framework for explaining empirical facts of the Iranian economy and will introduce a new approach to researchers. The main idea of this study is generalizing Ramsey model through including terms of trade and its calibration in the economy of Iran. For this purpose first, the model is explained. Then, the first order condition is derived and mathematical optimal path of variables is solved.  Finally, the model is calibrated by GAMS package for economy of Iran in time period (2006-2036). The results indicate that there is a feasible solution for model and the optimal path of variables can be observed. The optimal path of Gross National Production and Consumption are increasing but the optimal path of capital stock and investment is primarily increasing then decreasing. In the final section of this paper a sensitivity analysis is presented. Some scenarios are designed for the important parameters of model like time preferences rate, intertemporal substitution elasticity of consumption, labour growth rate and output elasticity of capital. Sensitivity analysis shows that output elasticity of capital and labour growth rate increased the social welfare and shifted optimal path of variables upward. But time preferences rate and intertemporal substitution elasticity of consumption had inverse effect on social welfare and optimal path of variables.

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Economic development, social welfare and improvement of living standards are main issues in economic planning, which requires higher economic growth as precondition. Time preference plays an important role in the health of the economy, given its contribution to capital formation, economic growth, and interest rate. The existence of the time preference reflects social impatience with the present value of consumption relative to future consumption. Therefore, if present generation attributes high weigh to itself in allocating resources between current and future generations, the available resources will decrease, and economic growth will stabilize in a lower rate. According to the microeconomic theoretical foundations, and using mathematical logic, this study provides a logical reasoning in analyzing macroeconomic phenomena. This research aims to illustrate how to time preference impacts economic growth. Using MATLAB software and calibrating the model for Iran’s economy, the optimal paths of consumption, savings, investment and economic growth are extracted with and without commitment. The results show that the optimal paths of capital stock, consumption and economic growth are in higher levels for full commitment than no- commitment, and these converge at the end-points. The final section will examine how to change in time preference and its impact on the optimal paths of variables. Running various scenarios show that an increase in the rate of time preference reduces economic welfare, the effective rate of time preference and economic growth.