This paper studies the influence of consumption externalities in the Ramsey model. In contrast to the recent literature … substitution is introduced. We give conditions for the observational equivalence between economies with consumption externalities … externalities. The conditions for optimal taxation are also derived. -- social status ; conspicuous consumption ; economic growth …

inefciencies due to negative consumption externalities, imperfect competition, and self-control problems. Our contributions are to … with two examples. dynamic externalities, internalities, addiction, optimal taxation, time consistent implementation …