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Endogenous Growth with Intertemporally Dependent Preferences Author info | Abstract | Publisher info | Download info | Related research | Statistics Giuseppe Ferraguto () (Bocconi University)
Patrizio Pagano () (Bank of Italy, Economic Research Department)
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This 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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Paper provided by Bank of Italy, Economic Research Department in its series Temi di discussione (Economic working papers) with number
382.
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Date of creation: Oct 2000Date of revision:
Handle: RePEc:bdi:wptemi:td_382_00Contact details of provider: Postal: Via Nazionale, 91 - 00184 Roma Web page: http://www.bancaditalia.it More information through EDIRC
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Keywords: preferences ; habits ; growth. ; 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 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
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Luca Dedola & Eugenio Gaiotti & Luca Silipo, 2004.
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Other versions: Emilia Bonaccorsi di Patti & Giorgio Gobbi, 2001.
"The Effects of Bank Consolidation and Market Entry on Small Business Lending ,"
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