This paper investigates household decisions when individual utility depends on a consumption reference level. The desire to ``keep up with the Joneses'' represents one such example. The prior literature shows that, in a Ramsey model, consumption externalities have no impact on steady state...

This paper sets up a dynamic general equilibrium model to study how the composition of technical progress affects the asymptotic speed of convergence. The following questions are addressed: Will endogenizing a fraction of the productivity increases as coming from learning by investing help to...

This paper analyzes the impact of positional preferences, exhibiting conspicuous consumption and conspicuous wealth, on optimal consumption- and income taxes, for an endogenous growth model with public capital. Positional preferences raise the endogenous growth rate if the elasticity of...

This paper explores a two-sector model of endogenous growth with AK technologies and production externalities. Unlike the standard one-sector AK model, the two-sector model may involve the relative price dynamics, so that there may exist transitional processes. It is shown that under certain...

This paper studies a two-sector model of endogenous technical change in which expansion of each production sector is associated with sector-specific R&D investment. It is shown that the pattern of growth is sensitive to the specification of intersectoral technological spillover as well as to the...

By examining two-sector models of endogenous growth with physical and human capital, this paper demonstrates that indeterminacy of equilibrium may emerge even in the absence of social increasing returns. The first model we examine assumes that both final good and new human capital production...

Using an endogenous growth model with physical and human capital, we explore short-run as well as long-run effects of fiscal policy in the presence of households' production activities. We first show that our model has a unique balanced-growth path that satisfies saddlepoint stability. We then...

This paper explores the effect of monetary policy on the speed of convergence. Using a neoclassical monetary growth model with a cash-in-advance constraint, we conduct numerical evaluation of the effect of changes in the growth rate of money supply on the converging speed of the economy. We find...

This paper extends the standard overlapping generations model of capital accumulation by introducing consumption externalities. It is assumed that each generation's felicity depends on the social level of benchmark consumption as well as on its own consumption. Since the benchmark consumption is...

This paper demonstrates that preference structure may play a pivotal role in generating indeterminacy in the stylized model of endogenous growth. By examining two-sector models of endogenous growth with human capital formation, we show that if the utility function of the representative family is...