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Consumption Externalities, Habit Formation, and Equilibrium Efficiency Author info | Abstract | Publisher info | Download info | Related research | Statistics Jaime Alonso-Carrera
Jordi Caballe ()
Xavier Raurich
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We analyze the welfare properties of the competitive equilibrium in a capital accumulation model where individual preferences are subjected to both habit formation and consumption spillovers. We also discuss how consumption externalities and habits interact to generate an inefficient dynamic equilibrium. Finally, we characterize optimal tax policies aimed to restore efficient decentralized paths.
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Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number
499.01.
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Length: 17
Date of creation: 05 Oct 2001Date of revision:
Handle: RePEc:aub:autbar:499.01Contact details of provider: Postal: 08193, Bellaterra, Barcelona Phone: 34 93 592 1203 Web page: http://pareto.uab.cat More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Xavier Vila).
Keywords: Habit Formation ; Consumption Externalities ; Equilibrium Efficiency ; Other versions of this item:
Find related papers by JEL classification: D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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References listed on IDEAS 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.: Abel, Andrew B, 1990.
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Christopher D. Carroll & Jody Overland & David N. Weil, 2000.
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Journal of Money, Credit and Banking ,
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Other versions: Alonso-Carrera, Jaime & Caballe, Jordi & Raurich, Xavier, 2005.
"Growth, habit formation, and catching-up with the Joneses ,"
European Economic Review ,
Elsevier, vol. 49(6), pages 1665-1691, August.
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Other versions: Ferson, Wayne E. & Constantinides, George M., 1991.
"Habit persistence and durability in aggregate consumption: Empirical tests ,"
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Brock, William A & Turnovsky, Stephen J, 1981.
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Constantinides, George M, 1990.
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Heaton, John, 1995.
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Full
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.)
Jang-Ting Guo, 2004.
"Tax Policy Under Keeping Up with the Joneses and Imperfectly Competitive Product Markets ,"
Econometric Society 2004 North American Winter Meetings
17, Econometric Society.
[Downloadable!]
Simone Valente, 2006.
"Notes on Habit Formation and Socially Optimal Growth ,"
Economics working paper series
06/48, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
[Downloadable!]
Ali Choudhary & Paul Levine, 2006.
"The 24/7 Society and Multiple Habits ,"
Department of Economics Discussion Papers
0506, Department of Economics, University of Surrey.
[Downloadable!]
Albert Marcet & Elisa Faraglia & Andrew Scott, 2008.
"In Search of a Theory of Debt Management ,"
UFAE and IAE Working Papers
743.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
[Downloadable!]
Other versions: repec:bep:sndecm:11:2007:2:1410-1410 is not listed on IDEAS
Livio Stracca & Ali al-Nowaihi, 2005.
"Keeping up with the Joneses, reference dependence, and equilibrium indeterminacy ,"
Working Paper Series
444, European Central Bank.
[Downloadable!]
Andersson, Fredrik W., 2006.
"Consumption Theory with Reference Dependent Utility ,"
Working Papers in Economics
226, Göteborg University, Department of Economics.
[Downloadable!]
Jaime Alonso-Carrera & Jordi Caball?Author-Email: jordi.caballe@uab.es & Xavier Raurich, .
"Growth, Habit Formation, and Catching-up\ with the Joneses ,"
UFAE and IAE Working Papers
497.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
[Downloadable!]
Other versions:
Alonso-Carrera, Jaime & Caballe, Jordi & Raurich, Xavier, 2005.
"Growth, habit formation, and catching-up with the Joneses ,"
European Economic Review ,
Elsevier, vol. 49(6), pages 1665-1691, August.
[Downloadable!] (restricted) Jordi Caballé & Ana I. Moro Egido, 2008.
"The Effect of Aspirations, Habits, and Social Security on the Distribution of Wealth ,"
ThE Papers
08/02, Department of Economic Theory and Economic History of the University of Granada..
[Downloadable!]
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