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Consequences Of Modeling Habit Persistence Author info | Abstract | Publisher info | Download info | Related research | Statistics Bossi, Luca
Gomis-Porqueras, Pere
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In this paper, we study the stationary and non-stationary equilibria of a deterministic, pure exchange, two-period overlapping generations model with habit persistence. We show that preferences with multiplicative habits can lead to quite different equilibrium outcomes compared to subtractive ones. The two most commonly adopted habit specifications can differ in terms of homotheticity, gross substitutability, and uniqueness of equilibria. We illustrate these differences in terms of steady-state equilibria, as well as local dynamics.
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Article provided by Cambridge University Press in its journal Macroeconomic Dynamics .
Volume (Year): 13 (2009)
Issue (Month): 03 (June)
Pages: 349-365
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Handle: RePEc:cup:macdyn:v:13:y:2009:i:03:p:349-365_08Contact details of provider: Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK Fax: +44 (0)1223 325150 Email: Web page: http://journals.cambridge.org/jid_MDY
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Luca Bossi & Pedro Gomis-Porqueras & David L. Kelly, .
"Optimal Second Best Taxation of Addictive Goods ,"
Working Papers
0708, University of Miami, Department of Economics.
[Downloadable!]
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