Consumption Externalities : A Representative Consumer Model when Agents are Heterogeneous *

  title={Consumption Externalities : A Representative Consumer Model when Agents are Heterogeneous *},
  author={Cecilia Garc{\'i}a-Pe{\~n}alosa},
  • Cecilia García-Peñalosa
  • Published 2007
We examine a growth model with consumption externalities where agents differ in their initial capital endowment and their reference group. We show under which conditions the aggregate equilibrium with heterogeneous agents replicates that obtained with a representative consumer, despite the fact that different individuals have different consumption levels. Next we consider the implications of the presence of consumption externalities for the long-run distributions of income and wealth. We find… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.
9 Citations
14 References
Similar Papers


Publications referenced by this paper.
Showing 1-10 of 14 references

Intertemporal and intratemporal substitution, and the speed of convergence in the neoclassical growth model,

  • S. J. Turnovsky
  • Journal of Economic Dynamics and Control
  • 2002
Highly Influential
16 Excerpts

Keeping up with the Joneses: Consumption externalities, portfolio choice, and asset

  • J. Gali
  • 1994
Highly Influential
4 Excerpts

Growth empirics: A panel data approach,

  • N. Islam
  • Quarterly Journal of Economics
  • 1995
Highly Influential
2 Excerpts

A contribution to the empirics of economic growth,

  • N. G. Mankiw, D. Romer, D. Weil
  • Quarterly Journal of Economics
  • 1992
Highly Influential
1 Excerpt

Distributional dynamics in a neoclassical growth model: The role of elastic labor supply,

  • S. J. Turnovsky
  • García-Peñalosa,
  • 2007

A representative consumer theory of distribution: A simple characterization of the Ramsey model,

  • C. García-Peñalosa, S.J
  • Turnovsky,
  • 2006

Status preference, wealth, and dynamics in an open economy,

  • W. H. Fisher
  • 2004
1 Excerpt

Jealousy and equilibrium overconsumption,

  • Press, Cambridge, B. Mass. Dupor, W. F. Liu
  • 2003

Similar Papers

Loading similar papers…