An aggregative model of capital accumulation with leisure-dependent utility

Hek, Paul A. de

doi:10.1016/s0165-1889(97)00119-x

Cited by 22 publications

(8 citation statements)

References 12 publications

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“…Kamihigashi (2015), on the other hand, argues that normality of leisure is what rules out multiple steady states. The results and examples of the present paper support an intuitive explanation by income effects as in Kamihigashi (2015) rather than by substitution effects as in De Hek (1998). In particular, we believe that a strong and positive income effect on consumption combined with inferiority of leisure is the most plausible explanation of the non-monotonicity of optimal solutions.…”

Section: Introductionsupporting

confidence: 79%

Cycles and chaos in the one-sector growth model with elastic labor supply

Sorger

2016

Econ Theory

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It is shown that the discrete-time version of the neoclassical one-sector optimal growth model with elastic labor supply and standard monotonicity and convexity assumptions on technology and preferences can have periodic solutions of any period as well as chaotic solutions. The optimality of these non-monotonic solutions is traced back to strong income effects. When technology and preferences are parameterized as it is commonly done in quantitative macroeconomic studies, these phenomena cannot occur.

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Section: Introductionsupporting

confidence: 79%

Cycles and chaos in the one-sector growth model with elastic labor supply

Sorger

2016

Econ Theory

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“…Incorporating leisure dependent utility is consistent with a large literature that studies the growth effects of endogenous labor supply (see de Hek (1998Hek ( , 2006; Eriksson (1996);Ladron-de-Guevara et al (1997, 1999; Ortigueira (1998Ortigueira ( , 2000andTurnovsky (1999, 2000)). An important feature of these models is that they employ an infinite horizon representative agent framework.…”

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confidence: 77%

Voting, Wealth Heterogeneity, and Endogenous Labor Supply

Ghate¹

2007

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We examine the link between voting outcomes, wealth heterogeneity, and endogenous labor leisure choice in the majority voting -endogenous growth frameworks of Alesina and Rodrik (1994) and Das and Ghate (2004). We augment these frameworks to incorporate leisure dependent utility and allow households to vote over factor specific income taxes. When agents vote over factor specific taxes, we show that the asymptotic convergence of factor holdings does not imply unanimity over the growth maximizing tax policy in the steady state. Unanimity over growth maximizing policies holds only when agents vote over a general income tax, and when agents vote over factor specific taxes but labor is exogenous.

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“…Endogenizing labor supply through leisure-dependent utility in models of economic growth has significant implications for the dynamics of these models, see e.g. Ladro´n-de-Guevara et al (1997) and De Hek (1998. The present analysis shows that the model may exhibit multiple balanced growth paths, and establishes a necessary condition for the existence of multiple balanced growth paths.…”

Section: Introductionmentioning

confidence: 57%

On taxation in a two-sector endogenous growth model with endogenous labor supply

Hek

2006

Journal of Economic Dynamics and Control

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This paper studies the effects of taxation on long-run growth in a two-sector endogenous growth model with (i) physical capital as an input in the education sector and (ii) leisure as an additional argument in the utility function. Income taxation -the same rate applies for capital and labor income -reduces the growth rate. The same is true if only labor income is taxed. However, if only capital income is taxed, the positive effect of an increase in total non-leisure time may dominate the direct negative effect, implying that capital taxation increases the longrun growth rate. r 2005 Elsevier B.V. All rights reserved. JEL classification: E20; H20; J22; J24; O41

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An aggregative model of capital accumulation with leisure-dependent utility

Cited by 22 publications

References 12 publications

Cycles and chaos in the one-sector growth model with elastic labor supply

Cycles and chaos in the one-sector growth model with elastic labor supply

Voting, Wealth Heterogeneity, and Endogenous Labor Supply

On taxation in a two-sector endogenous growth model with endogenous labor supply

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