Endogenous Growth with Intertemporally Dependent Preferences
AbstractThis paper presents an endogenous growth model with intertemporally dependent preferences and "Ak" technology. We derive sufficient conditions for a balanced growth path to be an equilibrium, provide a full characterization of the equilibrium dynamics of the economy, and explore the implications of habit formation for the patterns of cross-country growth and convergence. Finally, we show that the alternative departure from the standard assumption of isoelastic preferences represented by the use of a Stone-Geary utility function can be interpreted as a special case of the model with habit formation. Our results highlight the importance of preferences in the dynamics of growth, a point neglected in most of the literature.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 382.
Date of creation: Oct 2000
Date of revision:
preferences; habits; growth.;
Other versions of this item:
- Giuseppe Ferraguto & Patrizio Pagano, 2003. "Endogenous Growth with Intertemporally Dependent Preferences," The B.E. Journal of Macroeconomics, De Gruyter, vol. 0(1), pages 10.
- Ferraguto, G. & Pagano, P., 2000. "Endogenous Growth with Intertemporally Dependent Preferences," Papers 382, Banca Italia - Servizio di Studi.
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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.:
- Fabio Fornari & Carlo Monticelli & Marcello Pericoli & Massimo Tivegna, 1999.
"The Impact of News on the Exchange Rate of the Lira and Long-Term Interest Rates,"
Temi di discussione (Economic working papers)
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- Manuel A. GÃ³mez, 2010. "Endogenous Growth, Habit Formation and Convergence Speed," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1.
- Pagano, Patrizio, 2004. "Habit persistence and the marginal propensity to consume in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 18(3), pages 316-329, September.
- Luca Dedola & Eugenio Gaiotti & Luca Silipo, 2001.
"Money demand in the euro area: do national differences matter?,"
Temi di discussione (Economic working papers)
405, Bank of Italy, Economic Research and International Relations Area.
- Luca Dedola & Eugenio Gaiotti & Luca Silipo, 2004. "Money Demand in theEuroArea: Do National Differences Matter?," Macroeconomics 0404019, EconWPA, revised 24 Apr 2004.
- Karen Pittel, 2005. "Diskontraten: Endogen oder nicht endogen? Eine umweltrelevante Fragestellung," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 225(4), pages 441-458, July.
- Manuel Gómez, 2010. "A note on external habits and efficiency in the AK model," Journal of Economics, Springer, vol. 99(1), pages 53-64, February.
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