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Consumption habits in an overlapping-generations model

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  • Velculescu, Delia

Abstract

This paper introduces consumption habits in the Blanchard (1985) overlapping-generations model. It shows that steady-state capital and consumption are higher if individuals have habits than otherwise. Moreover, "inward habits" lead to higher steady-state capital and consumption compared to "outward habits."

Suggested Citation

  • Velculescu, Delia, 2011. "Consumption habits in an overlapping-generations model," Economics Letters, Elsevier, vol. 111(2), pages 127-130, May.
    • Handle: RePEc:eee:ecolet:v:111:y:2011:i:2:p:127-130
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    References listed on IDEAS

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