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


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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M. A. Gómez, "Equilibrium Dynamics in the Neoclassical Growth Model with Habit Formation and Elastic Labor Supply," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 465-469. doi: 10.4236/tel.2012.25087.

Conflicts of Interest

The authors declare no conflicts of interest.


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