A One-Sector Optimal Growth Model in which Consuming Takes Time

Cuong Le van, Thai Ha-Huy () and Thi-Do-Hanh Nguyen ()
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Thai Ha-Huy: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne
Thi-Do-Hanh Nguyen: Hai Phong University

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This article establishes a growth model in which consumption takes time. The agent faces a time constraint, i.e; her/his available amount of time must be optimally share between consuming time and working time. By using a dynamic programming argument, it is proved that the optimal capital sequences are monotonic and have property that converges to steady state. We also compare this model to the one agent growth model with elastic labor. We obtain that (i) When the quantity of time to consume one unit of consumption increases, the agent devotes less time for labour. (ii) When the quantity of time to consume one unit of consumption is smaller that the threshod, it is better for the economy to spend time to consume than to enjoy leisure. We have more time for labour. This implies more output and more consumption. We reverse the situation when the quantity of time to consume one unit of consumption is larger than the threshold. We give an example to illustrate this result. Finally, if both models have the same technology which is of constant returns to scale, then they have the same ratios capital stock per head and consumption per head.

Keywords: value function; time consuming model; allocation of time; elastic labour; leisure (search for similar items in EconPapers)
Date: 2016-10
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01400195v1
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Published in 2016

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Related works:
Working Paper: A One-Sector Optimal Growth Model in which Consuming Takes Time (2016)
Working Paper: A One-Sector Optimal Growth Model in Which Consuming Takes Time (2016)
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