WELFARE IMPLICATIONS OF THE INTERACTION BETWEEN HABITS AND CONSUMPTION EXTERNALITIES
Jaime Alonso-Carrera (),
Jordi Caballe () and
Xavier Raurich
International Economic Review, 2006, vol. 47, issue 2, 557-571
Abstract:
We analyze the welfare properties of the equilibrium path of a growth model where both habits and consumption externalities affect the utility of consumers. Our analysis highlights the crucial role played by complementarities between externalities and habits in order to generate an inefficient dynamic equilibrium. In particular, we show that the competitive equilibrium is inefficient when consumption externalities and habit-adjusted consumption are not perfect substitutes. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (30)
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
Working Paper: Welfare Implications of the Interaction between Habits and Consumption Externalities (2015) 
Working Paper: Welfare Implications of the Interaction between Habits and Consumption Externalities (2004) 
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: https://EconPapers.repec.org/RePEc:ier:iecrev:v:47:y:2006:i:2:p:557-571
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598
Access Statistics for this article
International Economic Review is currently edited by Harold L. Cole
More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().