All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

 
Ryoji Hiraguchi
 
''Habit formation and multiplicity of balanced growth path: a comment''
( 2007, Vol. 14 No.3 )
 
 
Chen (Journal of Money, Credit and Banking [2007] 25-48) studies the AK model where the utility function includes multiplicative habits in consumption and argues that the model has multiple balanced growth paths with different growth rates. However, one of his calculations is incorrect. I show that in his model, the optimal growth rate is uniquely determined.
 
 
Keywords: balanced growth path
JEL: N1 - Economic History: Macroeconomics and Monetary Economics; Growth and Fluctuations: General, International, or Comparative
 
Manuscript Received : Oct 07 2007 Manuscript Accepted : Oct 09 2007

  This abstract has been downloaded 1956 times                The Full PDF of this paper has been downloaded 166513 times