Equilibrium Dynamics in the Neoclassical Growth Model with Habit Formation and Elastic Labor Supply | Zendy

Manuel A. Gómez | Zendy

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Equilibrium Dynamics in the Neoclassical Growth Model with Habit Formation and Elastic Labor Supply

Author(s) -

Manuel A. Gómez

Publication year - 2012

Publication title -

theoretical economics letters

Language(s) - English

Resource type - Journals

eISSN - 2162-2078

pISSN - 2162-2086

DOI - 10.4236/tel.2012.25087

Subject(s) - uniqueness , economics , habit , mathematical economics , growth model , multiplicative function , saddle , stability (learning theory) , dynamics (music) , microeconomics , mathematics , physics , computer science , mathematical optimization , mathematical analysis , machine learning , psychology , acoustics , psychotherapist

This note analyzes the equilibrium dynamics in the neoclassical growth model with habit-forming preferences and elastic labor supply. Habits enter into utility in a multiplicative way. The specification of the habit formation process comprises the particular cases of internal and external habits. Existence, uniqueness and saddle-path stability of the steady state are proved analytically

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