Consumption habits in an overlapping-generations model

Delia Velculescu

Economics Letters, 2011, vol. 111, issue 2, 127-130

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."

Keywords: Habit; formation; Relative; consumption; Overlapping; generations (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:111:y:2011:i:2:p:127-130

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