Utility and production externalities, equilibrium efficiency and leisure specification

Manuel A. Gómez Suárez ()

Journal of Macroeconomics, 2008, vol. 30, issue 4, pages 1496-1519

Abstract: This paper analyzes the implications that the specification of the leisure activity has on the equilibrium efficiency in a two-sector endogenous growth model with human capital accumulation. We consider external effects of consumption and leisure in utility, and sector-specific externalities associated to physical and human capital in production. The optimal tax policy to correct for the distortions caused by the externalities is characterized under all the typical leisure specifications considered in the literature: home production, quality time and raw time. We show that the optimal policy depends markedly on the leisure specification.

Keywords: Endogenous; growth; Optimal; policy; Externalities; Leisure (search for similar items in EconPapers)
Date: 2008

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6X4M ... 3da3d9d970d9ce5517a6
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:jmacro:v:30:y:2008:i:4:p:1496-1519

Access Statistics for this article

Journal of Macroeconomics is edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Series data maintained by Heidi Boesdal ().