A two-sector model of endogenous growth with leisure externalities

• 成果类型: Article
• 署名作者: Azariadis, Costas; Chen, Been-Lon; Lu, Chia-Hui; Wang, Yin-Chi
• 署名单位: Washington University (WUSTL); Academia Sinica - Taiwan; National Taipei University; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2012.08.005
• 发表日期: 2013
• 页码: 843-857
• 关键词: Leisure externalities; Two-sector model; labor supply; Economic growth

摘要

This paper considers the impact of leisure preference and leisure externalities on growth and labor supply in a Lucas (1988) [12] type model, as in Gomez (2008) [7], with a separable non-homothetic utility and the assumption that physical and human capital are both necessary inputs in both the goods and the education sectors. In spite of the non-concavities due to the leisure externality, the balanced growth path is always unique, which guarantees global stability for comparative-static exercises. We find that small differences in preferences toward leisure or in leisure externalities can generate substantial differences in hours worked and growth, which may play a significant role in explaining differences in growth paths between the US and Europe, in addition to the mechanisms uncovered in Prescott (2004) [15] relying on differing marginal tax rates on labor income. Our model indicates, however, that a higher preference for leisure or leisure externality implies less growth but also less education attainment, which seems counterfactual. (C) 2013 Elsevier Inc. All rights reserved.