Carroll, Christopher D.; Overland, Jody R.; Weil, David N. - 2021
utility.' In the inward-looking' economy, individuals care about how their consumption in the current period compares to their … own consumption in the past (one way to describe this is habit-formation' in consumption). In the outward-looking' economy …, individuals care about how their own level of consumption compares with others' consumption. Consider the effect of negative shock …