Consumption Taxation, Social Status and Indeterminacy in Models of Endogenous Growth with Elastic Labor Supply
AbstractThis paper examines the effects of consumption taxation on longrun growth in an infinity-lived representative agent model of endogenous growth in which the desire for social status induces private agents to care about others’ wealth or consumption levels. We also allow for nonseparable preferences in own consumption, labor supply and social status that may cause indeterminacy of equilibrium. This analysis shows that consumption taxation generally raises (reduces) a long-run growth rate when the balanced growth path is indeterminate (determinate) in the models of wealth-induced social status and consumption externalities.
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Bibliographic InfoPaper provided by Graduate School of Economics and Business Administration, Hokkaido University in its series Discussion paper series. A with number 199.
Length: 35 pages
Date of creation: Apr 2008
Date of revision:
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Social Status; Endogenous Growth; Consumption Externality; Indeterminacy; Consumption Taxation; Endogenous Labor Supply; D62; D90; E62; O40; P10;
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D90 - Microeconomics - - Intertemporal Choice - - - General
- 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
- P10 - Economic Systems - - Capitalist Systems - - - General
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