In this paper, we show that incorporating the relational dimension into an otherwise standard OLG model and focusing on dynamic leisure externalities leads to dramatically different predictions. Here, we show that when the old perceive private and relational consumption as substitutable goods, a...

This study analyses the dynamics of a two-dimensional overlapping generations economy with endogenous labour supply à la Reichlin (J Econ Theory 40(1):89–102, <CitationRef CitationID="CR52">1986</CitationRef>) and aspirations. We show that the degree of nonlinearity of consumption externality in individual utility is responsible for the...</citationref>