Multiple BGPs in a Growth Model with Habit Persistence: A Comment

Patrick Toche

Journal of Money, Credit and Banking, 2009, vol. 41, issue 1, 189-195

Abstract: Recently in this journal, Chen (2007) analyzes a model of an economy without distortions in which rational forward‐looking households care about how their current consumption compares with their own past consumption. Chen claims the existence of two saddle‐point stable balanced growth paths. In this comment, I show that the claim is incorrect. There is a unique saddle‐point stable balanced growth path and no global indeterminacy.

Date: 2009
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https://doi.org/10.1111/j.1538-4616.2008.00192.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:41:y:2009:i:1:p:189-195

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