3 Comparison To Alternative Theories of Time-Varying Markups 10


This paper generalizes the standard habit formation model to an environment in which agents form habits over individual varieties of goods as opposed to over a composite consumption good. We refer to this preference specification as ‘deep habit formation’. Under deep habits, the demand function faced by individual producers depends on past sales. This… (More)

5 Figures and Tables


  • Presentations referencing similar topics