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Some Foundations for Multiplicative Habits Models

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  • Ryoji Hiraguchi

Abstract

While consumption models with multiplicative habits are becoming increasingly popular, some important theoretical questions about these models have not yet been addressed. This paper fills three such gaps: Existence of an optimal consumption path; satisfaction, by that path, of the consumption Euler equation; and convergence of that path to the stationary (steady state) path.

Suggested Citation

  • Ryoji Hiraguchi, 2004. "Some Foundations for Multiplicative Habits Models," Economics Working Paper Archive 516, The Johns Hopkins University,Department of Economics.
    • Handle: RePEc:jhu:papers:516
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    1. 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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    Cited by:

    1. Morhaim, Lisa & Ulus, Ayşegül Yıldız, 2023. "On history-dependent optimization models: A unified framework to analyze models with habits, satiation and optimal growth," Journal of Mathematical Economics, Elsevier, vol. 105(C).
    2. Gómez, Manuel A., 2021. "On the closed-form solution of an endogenous growth model with anticipated consumption," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    3. Gomez Suarez, Manuel A., 2008. "Utility and production externalities, equilibrium efficiency and leisure specification," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1496-1519, December.
    4. Gómez, Manuel A. & Monteiro, Goncalo, 2015. "Internal habits in an endogenous growth model with elastic labor supply," Economic Modelling, Elsevier, vol. 51(C), pages 583-595.
    5. Gómez Manuel A., 2010. "Endogenous Growth, Habit Formation and Convergence Speed," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-32, January.
    6. Hiraguchi, Ryoji, 2011. "A two sector endogenous growth model with habit formation," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 430-441, April.
    7. Shinya Tsukahara, 2017. "Habit formation, growth, and Ramsey's conjecture," Economics Bulletin, AccessEcon, vol. 37(4), pages 2871-2880.
    8. van den Bijgaart, Inge, 2016. "Essays in environmental economics and policy," Other publications TiSEM 298bee2a-cb08-4173-9fe1-8, Tilburg University, School of Economics and Management.
    9. van den Bijgaart, I.M., 2017. "Too slow a change? Deep habits, consumption shifts and transitory tax," Working Papers in Economics 701, University of Gothenburg, Department of Economics.
    10. 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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