A note on conspicuous leisure, animal spirits and endogenous cycles

Mark Weder

Portuguese Economic Journal, 2004, vol. 3, issue 1, No 1, 13 pages

Abstract: Abstract. This paper investigates general equilibrium effects of conspicuous leisure. It finds that leisure externalities reduce the degree of other market imperfections needed to generate indeterminacy or sunspot equilibria - endogneous cycles become empirically more plausible. Sunspot equilibria are possible with a downward-sloping labor demand schedule. The economic reasoning behind the result is that with conspicuous-externalities, labor is drawn more easily in and out of leisure to help fulfill agents’ expectations.

Keywords: Conspicuous leisure; Business cycles; Indeterminacy; Irregular economies; Sunspots (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (13)

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DOI: 10.1007/s10258-004-0026-y

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