Habit Persistence and Money in the Utility Function

The paper introduces habit persistence in consumption decisions in an infinitely-lived agents monetary model where money enters in the utility of the agent. In this case, we show that the equilibrium is saddle path whereas Auray, Collard and Fève [2004] showed that the interplay between habit persistence and cash-in-advance generates real indeterminacy. These two distinct but commonly used framework do not lead to the same dynamic properties, therefore.

MoreLess

Year of publication:	2004-04-22
Authors:	Auray, Stéphane ; Fève, Patrick ; Collard, Fabrice
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 5.2004, 10, p. 1-9
Publisher:	AccessEcon

More details

Extent:	application/pdf
Type of publication:	Article
Classification:	E0 - Macroeconomics and Monetary Economics. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010835795