Conspicuous consumption and generation replacement in a model of perpetual youth

• 成果类型: Article
• 署名作者: Wendner, Ronald
• 署名单位: University of Graz
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2010.08.005
• 发表日期: 2010
• 页码: 1093-1107
• 关键词: Consumption externality; labor productivity; Gradual retirement; overlapping generations; Keeping up with the Joneses; optimal taxation; capital taxation

摘要

This paper investigates household decisions in an overlapping generations model in which individual utility depends on a weighted average of consumption of one's peers. In contrast to representative agent economies, the consumption externality generally affects savings and growth rates. The effects critically depend on the rate at which labor productivity changes with age. For a high (low) rate, the externality lowers (raises) the steady state propensity to consume out of total wealth. The optimal allocation can be decentralized by a (reverse) unfunded social security system if the rate of labor productivity decline is high (low). In contrast to discrete time OLG models, the optimal steady state capital income tax is zero, in spite of the externality. (C) 2010 Elsevier B.V. All rights reserved.