EQUILIBRIUM DYNAMICS IN AN ENDOGENOUS GROWTH MODEL WITH HABIT FORMATION AND ELASTIC LABOR SUPPLY

Manuel Gómez

Macroeconomic Dynamics, 2015, vol. 19, issue 3, 618-642

Abstract: This paper analyzes the dynamics of an endogenous growth model with external habit formation and elastic labor supply. We first derive the conditions for the existence, uniqueness, and saddlepath stability of a feasible steady state with positive long-run growth. The global dynamics of the economy are characterized by phase-diagram analysis. Then we characterize the comparative static effects of shocks in preferences and production parameters analytically. The comparative dynamic effects of the shocks are characterized by phase-diagram analysis.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:cup:macdyn:v:19:y:2015:i:03:p:618-642_00

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