This paper presents a fertility choice model in which the mortality rate is also endogenously determined and health expenditure provides utility to individuals as well as affects the mortality rate. The analysis shows that the model predictions agree with the empirical evidence on the...

This paper quantifies the welfare cost of consumption externalities in an endogenous growth model with habit formation. Agent’s utility depends on both current consumption and a reference consumption level determined by economy-wide average past consumption. Although utility may be lower in...