Endogenous Growth, Habit Formation and Convergence Speed
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Endogenous Growth, Habit Formation and Convergence SpeedAutor(es)
Data
2010Cita bibliográfica
Manuel A. Gomez (2010) “Endogenous Growth, Habit Formation and Convergence Speed”, The B.E. Journal of Macroeconomics: Vol. 10: Iss. 1 (Topics), Article 1. https://doi.org/10.2202/1935-1690.1971
Resumo
[Abstract] This paper analyzes the effect on the economy dynamics of alternative formulations of habit
persistence in an endogenous growth model. The focus is on the impact on the convergence speed,
which is the key determinant of the local dynamics. In contrast with previous numerical results,
we show that the external-habits economy may converge at a higher, lower or equal rate than
the internal-habits economy depending on the specification of the utility function. We also prove
that the higher the strength of habits and the lower the speed of adjustment of habits to current
consumption, the lower the convergence speed.
Palabras chave
Habit formation
Convergence speed
External habits
Internal habits
Endogenous growth
Convergence speed
External habits
Internal habits
Endogenous growth
Versión do editor
ISSN
1555-0486