The wise use of leisure time. A three-sector endogenous growth model with leisure services

G. Candela, M. Castellani and R. Dieci

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In this paper, starting from the two-sector Uzawa-Lucas model, we study a three-sector endogenous growth model with leisure services. By extending the endogenous growth model with leisure developed by Ladr n-de Guevara et al. [1999], our model generalizes the standard time allocation problem, in that it explicitly accounts for the way total time is allocated between work, education, purely free time and time spent on leisure services, where the latter represents therefore an additional time-consuming activity. Accordingly, service consumption is tied to a production sector for leisure services in our model. We fully characterize Balanced Growth Path (BGP) equilibria in terms of time allocation and growth, and show that multiple BGPs are possible. Since service production plays an important role in economic development, we carry out a comparative analysis of the dynamic performance of different economic systems - Post-Industrial Economy vs. Service Economy - along a BGP.

JEL-codes: D90 O14 O41 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp1010

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