Rejuveniles are "grown-ups who cultivate juvenile tastes in products and entertainment". In this note, we study a standard AK growth model of overlapping generations populated by rejuveniles. For our purposes, rejuveniles are old agents who derive utility from "keeping up" their consumption with that of the current young. We find that such cross-generational keeping up is capable of generating interesting equilibrium growth dynamics, including growth cycles. No such growth dynamics is possible either in the baseline model, one where no such generational consumption externality exists, or for almost any other form of keeping up. Steady-state growth in a world with rejuveniles may be higher than that obtained in the baseline model.
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12653.
Length: Date of creation: 05 Aug 2006 Date of revision: Publication status: Published in European Economic Review, August 2008, Vol. 52, No. 6, pp. 1055-1071. Handle: RePEc:isu:genres:12653
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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.:
Klaus Wälde, 2005.
"Endogenous Growth Cycles,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 867-894, 08.
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Kiminori Matsuyama, 1996.
"Growing Through Cycles,"
Discussion Papers
1203, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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