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Diverse Growth Patterns with External Habit Formation

Author

Listed:
  • Liutang Gong

    () (Guanghua School of Management, Peking University)

  • Wei Wang

    () (University of International Business and Economics)

Abstract

This paper investigates an external habit formation model with weakly concave utility functions. We show that there exist a continuum of history-dependent balanced growth path (BGP) in this model. This feature of our model can help understand a variety of cross-country growth patterns that are observed in the data.

Suggested Citation

  • Liutang Gong & Wei Wang, 2019. "Diverse Growth Patterns with External Habit Formation," Economics Bulletin, AccessEcon, vol. 39(2), pages 1418-1423.
  • Handle: RePEc:ebl:ecbull:eb-19-00451
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2019/Volume39/EB-19-V39-I2-P134.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Gómez, Manuel A., 2014. "Equilibrium dynamics in a class of one-sector endogenous growth models with external habits: An application of special functions," Journal of Mathematical Economics, Elsevier, vol. 51(C), pages 50-54.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Diverse growth patterns; History dependence; Balanced growth paths; Habit formation;

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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