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Endogenous growth with addictive habits

Augeraud-Veron, Emmanuelle; Bambi, Mauro

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Authors

Emmanuelle Augeraud-Veron



Abstract

In this paper, we investigate the global dynamics of an endogenous growth model with linear technology and addictive habits. We find feasible parameters’ conditions under which: (a) the resulting equilibrium consumption path is steeper than in a standard AK model; (b) endogenous fluctuations in the form of damping fluctuations around the balanced growth path emerge; (c) the Easterlin’s paradox emerges. The relevance of these results is explained comparing our findings with the results already known in the existing literature.

Citation

Augeraud-Veron, E., & Bambi, M. (2015). Endogenous growth with addictive habits. Journal of Mathematical Economics, 56, 15-25. https://doi.org/10.1016/j.jmateco.2014.11.002

Journal Article Type Article
Acceptance Date Nov 23, 2014
Online Publication Date Dec 3, 2014
Publication Date Jan 1, 2015
Deposit Date Aug 2, 2018
Publicly Available Date Sep 24, 2018
Journal Journal of Mathematical Economics
Print ISSN 0304-4068
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 56
Pages 15-25
DOI https://doi.org/10.1016/j.jmateco.2014.11.002
Public URL https://durham-repository.worktribe.com/output/1324716

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