Endogenous Growth with Intertemporally Dependent Preferences

Giuseppe Ferraguto () and Patrizio Pagano ()
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Giuseppe Ferraguto: Bocconi University

No 382, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper presents an endogenous growth model with intertemporally dependent preferences and "Ak" technology. We derive sufficient conditions for a balanced growth path to be an equilibrium, provide a full characterization of the equilibrium dynamics of the economy, and explore the implications of habit formation for the patterns of cross-country growth and convergence. Finally, we show that the alternative departure from the standard assumption of isoelastic preferences represented by the use of a Stone-Geary utility function can be interpreted as a special case of the model with habit formation. Our results highlight the importance of preferences in the dynamics of growth, a point neglected in most of the literature.

Keywords: preferences; habits; growth. (search for similar items in EconPapers)
JEL-codes: D91 E32 O41 (search for similar items in EconPapers)
Date: 2000-10
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Endogenous Growth with Intertemporally Dependent Preferences (2003)
Working Paper: Endogenous Growth with Intertemporally Dependent Preferences (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_382_00

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