Habit persistence, money, and overlapping generations
AbstractThis paper provides a comprehensive characterization of the stationary and non-stationary monetary equilibria in a two-period pure exchange overlapping generations model with multiplicative habit persistence preferences. Somewhat surprisingly, the upshot is that multiplicative habit persistence preferences do not affect the qualitative properties of the dynamical system in these models. In addition, the qualitative properties of models with subtractive and multiplicative habits are largely similar. Any possibility of cyclical fluctuations beyond periodicity two is also ruled out.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 30 (2006)
Issue (Month): 12 (December)
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Web page: http://www.elsevier.com/locate/jedc
Other versions of this item:
- Bunzel, Helle, 2006. "Habit Persistence, Money, and Overlapping Generations," Staff General Research Papers 12405, Iowa State University, Department of Economics.
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