Non-monotonic welfare dynamics in a growing economy
In an overlapping generations economy with endogenous income growth, I combine themes from the work of Cooper et al. (2001), Kapur (2005) and Eaton and Eswaran (2009) in order to provide an example of an economy whose welfare dynamics are non-monotonic. Particularly, the evolution of social welfare can be distinguished between two different regimes that arise naturally during the process of economic development. At relatively early stages, status concerns are inactive and welfare increases following the rising consumption of normal goods. During the later stages, however, individuals engage in some type of status competition that does not allow consumption to improve their well-being: their welfare actually declines as successive generations of agents increase labour effort at the expense of leisure.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-1037, October.
- Blanchflower, David G. & Oswald, Andrew J., 2001.
"Well-Being Over Time in Britain and the USA,"
The Warwick Economics Research Paper Series (TWERPS)
616, University of Warwick, Department of Economics.
- Cooper, B. & Garcia-Penalosa, C., 1998.
"Status Effects and Neganive Utility Growth,"
150, Economics Group, Nuffield College, University of Oxford.
- Samuel Bowles & Yongjin Park, 2004.
"Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?,"
UMASS Amherst Economics Working Papers
2004-14, University of Massachusetts Amherst, Department of Economics.
- Samuel Bowles & Yongjin Park, 2005. "Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?," Economic Journal, Royal Economic Society, vol. 115(507), pages 397-412, November.
- Samuel Bowles & Yongjin Park, 2003. "Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right," Department of Economics University of Siena 409, Department of Economics, University of Siena.
- Erzo F.P. Luttmer, 2004.
"Neighbors as Negatives: Relative Earnings and Well-Being,"
NBER Working Papers
10667, National Bureau of Economic Research, Inc.
- Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 963-1002.
- Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government.
- Bruno S. Frey & Alois Stutzer, "undated".
"What can Economists Learn from Happiness Research?,"
IEW - Working Papers
080, Institute for Empirical Research in Economics - University of Zurich.
- Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
- Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
- B.Curtis Eaton & Mukesh Eswaran, 2009. "Well-being and Affluence in the Presence of a Veblen Good," Economic Journal, Royal Economic Society, vol. 119(539), pages 1088-1104, 07.
- Golden, Lonnie & Wiens-Tuers, Barbara, 2006. "To your happiness? Extra hours of labor supply and worker well-being," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 382-397, April.
- Baochun Peng, 2008. "Relative deprivation, wealth inequality and economic growth," Journal of Economics, Springer, vol. 94(3), pages 223-229, September.
- Michael Hagerty & Ruut Veenhoven, 2003. "Wealth and Happiness Revisited – Growing National Income Does Go with Greater Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 64(1), pages 1-27, October.
- de la Croix, David, 1995.
"Economic Growth and the Relativity of Satisfaction,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1995023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
- Mark Wooden & Diana Warren, 2007. "Paid Annual Leave and Working Hours," Melbourne Institute Working Paper Series wp2007n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Basant Kapur, 2005. "Can faster income growth reduce well-being?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 25(1), pages 155-171, October.
- Richard Easterlin, 2005. "Feeding the Illusion of Growth and Happiness: A Reply to Hagerty and Veenhoven," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 74(3), pages 429-443, December.
- J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November.
When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:33:y:2011:i:2:p:303-312. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.