This paper presents a model of endogenous growth in the presence of habit formation in consumption. We argue that in addition to the traditional disutility effects of habitual consumption, the past history of consumption represents a past record of transactions as well. As a result, the...

This paper proposes a model of economy with weakly non-separable preferences for both work effort and consumption. Households who derive utility from consumption of a single commodity and leisure take into account the habitual dependency of their utility on both labour supply and consumption in...

Current paper proposes an extension of the seminal model by Holmstrom Tirole (1997) of the exogenous liquidity supply in presence of moral hazard to the case that includes private asset recovery under the limited liability of the entrepreneur. In our model partial private recovery applies to the...

This paper develops a neoclassical growth model under the assumption of comprehensive habits that incorporate both consumption and labour supply decisions of the households. We show that in presence of comprehensive habits, households will supply more labour than in case of no habits. In...