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

Cuong Le van, Thai Ha-Huy () and Thi-Do-Hanh Nguyen ()
Additional contact information
Thai Ha-Huy: EPEE - Université d'Evry
Thi-Do-Hanh Nguyen: Centre d'Economie de la Sorbonne, https://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

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: time consuming model, allocation of time; elastic labour; leisure; value function (search for similar items in EconPapers)
JEL-codes: C6 D6 D9 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-10
New Economics Papers: this item is included in nep-gro and nep-ore
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ftp://mse.univ-paris1.fr/pub/mse/CES2016/16072.pdf (application/pdf)

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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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:16072

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