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| Stéphane Auray, Patrick Fève and Fabrice Collard |
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| ''Habit Persistence and Money in the Utility Function'' |
| ( 2004, Vol. 5 No.10 ) |
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| 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. |
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| Manuscript Received : Mar 25 2004 | | Manuscript Accepted : Apr 22 2004 |
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