Consumption Composition and Macroeconomic Dynamics
Alonso Carrera, Jaime
Caballé, Jordi (Universitat Autònoma de Barcelona. Departament d'Economia i d'Història Econòmica)
Raurich, Xavier

Data:	2015
Resum:	We analyze the transitional dynamics of an economic model with heterogeneous consumption goods where convergence is driven by two different forces: the typical diminishing returns to capital and the dynamic adjustment in consumption expenditure induced by the variation in relative prices. We show that this second force affects the growth rate if the consumption goods are produced with technologies exhibiting different capital intensities and if the intertemporal elasticity of substitution is not equal to one. Because the aforementioned growth effect of relative prices arises only under heterogeneous consumption goods, the transitional dynamics of this model exhibits striking differences with the growth model with a single consumption good. We also show that these differences in the transitional dynamics can give raise to large discrepancies in the welfare cost of shocks.
Ajuts:	Ministerio de Economía y Competitividad ECO2012-32392 Ministerio de Economía y Competitividad ECO2012-34046 Ministerio de Economía y Competitividad ECO2011-23959 Ministerio de Educación PR2009-0162 Ministerio de Educación SM2009-0001 Agència de Gestió d'Ajuts Universitaris i de Recerca 2014-SGR-803 Agència de Gestió d'Ajuts Universitaris i de Recerca 2014-SGR-493
Nota:	Altres ajuts: XG/10PXIB300177PR
Drets:	Tots els drets reservats.
Llengua:	Anglès
Document:	Article ; recerca ; Versió publicada
Matèria:	Consumption growth ; Multi-sector growth models ; Transitional dynamics
Publicat a:	The B.E. journal of macroeconomics, Vol. 15, Num. 1 (2015) , p. 1-42, ISSN 1935-1690

DOI: 10.1515/bejm-2014-0025

42 p, 3.2 MB

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