Conspicuous Consumption, Economic Growth, and Taxation: A Generalization

Fisher, Walter H. and Hof, Franz X. (March 2000) Conspicuous Consumption, Economic Growth, and Taxation: A Generalization. Former Series > Working Paper Series > IHS Economics Series 77

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Abstract

Abstract: This paper studies the infuence of consumption externalities in the Ramsey model. In contrast to the recent literature, a quite general specification of preferences is used and the concept of the effective intertemporal elasticity of substitution is introduced. We give conditions for the observational equivalence between economies with consumption externalities and externality-free economies. An additional key result is that there exist several types of instantaneous utility functionsin which the decentralized solution coincides with the socially planned one in spite of the presence of consumption externalities. The conditions for optimal taxation are also derived.;

Item Type:	IHS Series
Keywords:	'Social status' 'Conspicuous consumption' 'Economic growth'
Classification Codes (e.g. JEL):	D62, D91, E21, E62
Date Deposited:	26 Sep 2014 10:37
Last Modified:	26 Sep 2019 16:54
URI:	https://irihs.ihs.ac.at/id/eprint/1248

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