Status Preference, Wealth and Dynamics in the Open Economy

Fisher, Walter H.

doi:10.1111/j.1465-6485.2004.00112.x

Cited by 9 publications

(11 citation statements)

References 38 publications

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“…Observe that the reaction of r e to a rise in l is ambiguous, because, on the one hand, the market rate of return r = F k increases, while, on the other hand, the status-dependent component, which equals c (k; l) k 1 , declines. 7 More speci…cally, a rise in _ w=w by one percentage point causes the growth rate of labor supply to rise by 1 percentage points and the growth rate of labor demand to fall by 1 percentage points.…”

Section: Employment Dynamicsmentioning

confidence: 99%

“…In equilibrium, the growth rate of employment rises by less than one-for-one, since a rise in the growth rate of wages-generating an increase in the growth rate of labor supply-is required to maintain equilibrium in the labor market over time. 7 In order to obtain a di¤erential equation for equilibrium employment in the form…”

Section: Employment Dynamicsmentioning

confidence: 99%

“…In contrast, the relative wealth approach is employed in Jeanne (1997, 2001a,b), Futagami and Shibata (1998), Hof and Wirl (2003), Fisher (2004), Van Long and Shimomura (2004a, b), and Fisher and Hof (2005). In the majority of this research the supply of labor is exogenously given.…”

Section: Introductionmentioning

confidence: 99%

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The quest for status and endogenous labor supply: the relative wealth framework

Fisher

Hof²

2008

J. Econ.

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This paper introduces the quest for status into the Ramsey model with endogenous labor supply. We focus our attention on relative wealth preferences. In contrast to relative consumption preferences, they allow for the possibility that agents work too little in the long run, while under both speci…cations the steady-state levels of consumption and the stock of physical capital exceed their socially optimal counterparts. The initial phase of transitional dynamics is unambiguously characterized by under-consumption and excessive work e¤ort. The social optimum can be replicated by taxing capital income, where the optimal tax rate increases as physical capital accumulates.JEL classi…cation: D62, D91, E21.

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Section: Employment Dynamicsmentioning

confidence: 99%

Section: Employment Dynamicsmentioning

confidence: 99%

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The quest for status and endogenous labor supply: the relative wealth framework

Fisher

Hof²

2008

J. Econ.

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“…2 Consumption externalities have also been used by authors such as Abel (1990) and Galí (1994), to study asset pricing, while Ljungqvist and Uhlig (2000) employ the "Catching-up-1 Another branch of the macroeconomic literature in this area assumes that social standing depends on relative wealth, rather than on relative consumption. See, for example, the recent work of Jeanne (1997, 2001a, b), Futagami and Shibata (1998), Fisher (2004), Van Long and Shimomura (2004a, b), and Fisher and Hof (2005a, b).…”

Section: Introductionmentioning

confidence: 99%

Keeping up with the ageing Joneses

Fisher

Heijdra

2009

Journal of Economic Dynamics and Control

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In this paper we consider the implications of relative consumption externalities in the Blanchard-Yaari overlapping generations framework. Unlike most of the macroeconomic literature that studies this question, the differences between agents, and, thus, in their relative position, persist in equilibrium. We show in our fixed employment model that consumption externalities lower consumption and the capital stock in long-run equilibrium, a result in sharp contrast to the recent findings of Liu and Turnovsky (2005). In addition, we solve for the intertemporal path of the economy to investigate its response to demographic shocks, specifically, to permanent changes in the birth and death rates.JEL Codes: D91, E21

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“…3 An alternative branch of this line of research speciÞes that status depends on relative wealth, rather than on relative consumption. Recent authors who have employed this approach include Corneo and Jeanne (1997), Futagami and Shibata (1998), and Fisher (2004). Fisher (2004) shows how relative wealth preferences can be used to obtain-in the context of the small open economy Ramsey model with perfect capital mobility-an interior, steady-state saddlepoint.…”

Section: Introductionmentioning

confidence: 99%