Rational Habit Modification in Consumption: the Role of Durables and Credit

George Messinis

No 681, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: Since Brown (1952), standard habit formation models of consumption have exclusively focused on non-durables and services expenditure, and have assumed that the depreciation of the habit stock is a linear, univariate process. This paper builds on Ermini (1997) to dispense with these two assumptions and arrive at two alternative models of habit modification.

Keywords: CREDIT; CONSUMPTION; PRODUCTION (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Pages: 47 pages
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:681

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