We consider an economy where individuals use their standard of living based on past consumption in order to evaluate the utility arising from current consumption. We analyse how this process of preference formation affects the bequest motive. We show that habits (based on one's own past...

We analyze the welfare properties of the equilibrium path of a growth model where both habits and consumption externalities affect the utility of consumers. Our analysis highlights the crucial role played by complementarities between externalities and habits in order to generate an inefficient...

We analyze the transitional dynamics of an endogenous growth model with heterogeneous consumption goods. In this model, convergence is driven by two different forces: the diminishing returns to capital and the growth of the relative price between physical and human capital. Because this second...

In this paper, we show that consumption externalities are a source of equilibrium indeterminacy in a growth model with endogenous labor supply. In particular, when the marginal rate of substitution between own consumption and the others' consumption is constant along the equilibrium path, the...

We analyze the transitional dynamics of a model with heterogeneous consumption goods. In this model, convergence is driven by two different forces: the typical diminishing returns to capital and the sectoral change inducing the variation in relative prices. We show that this second force a¤ects...

We analyze the equilibrium of a multi-sector exogenous growth model where the introduction of minimum consumption requirements drives structural change. We show that equilibrium dynamics simultaneously exhibt structural change and balanced growth of aggregate variables as is observed in US when...

This paper proposes a multi-regional, general equilibrium model with capital accumulation to analyze the economic impact of the spatial distribution of public capital formation. This model is calibrated and solved by using data for the Spanish economy in order to simulate some comparative...

This paper proposes a multi-regional, general equilibrium model with capital accumulation to analyze the economic impact of the spatial distribution of public capital formation. This model is calibrated and solved by using data for the Spanish economy in order to simulate some comparative...

We characterize the dynamic equilibrium of a two-sector endogenous growth model with constant returns to scale. We assume that both sectors produce consumption and investment goods, and we introduce a minimum consumption requirement. In this model, economies with the same fundamentals but...