Work

Comparison Utility in a Growth Model

Year: 1997

Type: article

Abstract: We examine the dynamics of two endogenous-growth modelsin which agents have comparison utility. In the inward-lookingeconomy, individuals care about how their current consumptioncompares with their own past consumption. In the outward-lookingeconomy, they care about how their own consumption compares withother people‘s consumption. In response to a negative shock tocapital, saving and growth will temporarily fall in both of themodels that we consider but will remain constant in a model withstandard preferences. The decline will be smaller in the outward-than in the inward-looking case, but utility will be lower inthe former case because of a negative externality.

Source: Journal of Economic Growth

DOI: 10.1023/a:1009740920294

Authors: Christopher D. Carroll, Jody Overland, David N. Weil

Institutions: National Bureau of Economic Research, Johns Hopkins University, University of Colorado Denver, Brown University

Language: English

Topic: Economic Growth and Productivity

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funder: Yale University

OpenAlex ID: W1482610366

FWCI: 4.286

Cites: 28

Cited by: 236

Related to: 10