dependence on average consumption. We argue that accounting for consumption externalities in growth models requires consideration … inefficiently low savings and growth because of external habits. In semi-endogenous models, consumption externalities have no growth … effects but rather level effects on the long-run research intensity. In exogenous growth models, externalities only slow down …

(MVPF) analysis suggests that the reform paid for itself when taking the positive fiscal externalities in the labor market …