Will the consumption externalities' effects in the Ramsey model please stand up?

Ron Wendner

Economics Letters, 2011, vol. 111, issue 3, 210-212

Abstract: According to the prior literature, in a Ramsey model, consumption externalities have no impact on steady state behavior, once labor supply is exogenous. In contrast, this paper argues that -- in the presence of technical change -- consumption externalities always affect steady state behavior, via their impact on the elasticity of marginal utility of consumption.

Keywords: Consumption; externality; Keeping; up; with; the; Joneses; Ramsey; model; Intertemporal; elasticity; of; substitution (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (16)

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Working Paper: Will the Consumption Externalities' Effects in the Ramsey Model Please Stand Up? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:111:y:2011:i:3:p:210-212

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