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Rejuveniles and Growth

Listed author(s):
  • Richard C. Barnett
  • Joydeep Bhattacharya

    ()

    (School of Economics and Management, University of Aarhus, Denmark)

Rejuveniles are "people who cultivate tastes and mind-sets tradi- tionally associated with those younger than themselves." (Noxon, 2006) In this paper, we study a standard AK growth model of overlapping generations populated by rejuve- niles. 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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File URL: ftp://ftp.econ.au.dk/afn/wp/07/wp07_11.pdf
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Paper provided by Department of Economics and Business Economics, Aarhus University in its series Economics Working Papers with number 2007-11.

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Length: 25
Date of creation: 19 Sep 2007
Handle: RePEc:aah:aarhec:2007-11
Contact details of provider: Web page: http://www.econ.au.dk/afn/

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  1. de la Croix, David & Michel, Philippe, 1997. "Optimal growth when tastes are inherited," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1997012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Jun 1997.
  2. Bhattacharya, Joydeep & Russell, Steven, 2003. "Two-period cycles in a three-period overlapping generations model," Journal of Economic Theory, Elsevier, vol. 109(2), pages 378-401, April.
  3. Klaus, WAELDE, 2003. "Endogenous growth cycles," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 15 Mar 2004.
  4. Carmen Camacho & David De La Croix & Lionel Artige, 2004. "Wealth Breeds Decline: Reversals of Leadership and Consumption Habits," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00683805, HAL.
  5. Jaime Alonso-Carrera & Jordi Caballé & Xavier Raurich, 2004. "Aspirations, Habit Formation, and Bequest Motive," UFAE and IAE Working Papers 641.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  6. Matsuyama, K., 1996. "Growing through cycles," DELTA Working Papers 96-18, DELTA (Ecole normale supérieure).
  7. Bruce D. Smith, 1991. "Interest on Reserves and Sunspot Equilibria: Friedman's Proposal Reconsidered," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 93-105.
  8. 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.
  9. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September.
  10. Díaz, Antonia & Álvarez, María José, 2001. "Minimum consumption and transitional dynamics in wealth distribution," UC3M Working papers. Economics we015013, Universidad Carlos III de Madrid. Departamento de Economía.
  11. Bunzel, Helle, 2006. "Habit Persistence, Money, and Overlapping Generations," Staff General Research Papers Archive 12405, Iowa State University, Department of Economics.
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  13. Erkki Koskela & Mikko Puhakka, 2006. "Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences," CESifo Working Paper Series 1737, CESifo Group Munich.
  14. Alessie, Rob & Lusardi, Annamaria, 1997. "Consumption, saving and habit formation," Economics Letters, Elsevier, vol. 55(1), pages 103-108, August.
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