This paper examines the effect of inflation on effort and productivity in a representative agent model. We allow individual effort to be a continuous choice variable, which affects utility negatively and output positively. Our general model shows that the effect of inflation on effort, and hence...

Work ethics affect labour supply. This idea is modelled assuming that work is habit forming. We introduce working habits in a neoclassical growth model and compare its outcomes with a model without habit formation. In addition, we analyse the impact of different forms of technical progress. The...

The intertemporal substitution model of labor supply has been based on closed economy models. This paper studies the intertemporal substitution hypothesis in an open economy. It derives the long run labor supply as a function of the real wage, real interest rate and real exchange rate from a...

Work ethics affects labor supply. This idea is modeled assuming that work is habit forming. This paper introduces working habits in a neoclassical growth model and compares its outcomes with a model without habit formation. In addition, it analyzes the impact of different forms of technical...

This paper examines a model with habit formation in consumption. The model leads to higher equilibrium values in consumption, output, capital accumulation and labor supply than the neoclassical growth model with elastic labor supply. Comparative static analysis shows that an increase in the...