Some Foundations for Multiplicative Habits Models
AbstractWhile 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.
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Bibliographic InfoPaper provided by The Johns Hopkins University,Department of Economics in its series Economics Working Paper Archive with number 516.
Date of creation: Sep 2004
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- NEP-ALL-2004-11-22 (All new papers)
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