DURABLE CONSUMPTION AS A STATUS GOOD: A STUDY OF NEOCLASSICAL CASES



where x = (Ei, Fi, Gi, Li)tand where the constants for i = 1, 2 are written as

Gi       = Gi  = -μf ttLi

(1+ β + δ) - ψi   φi(ψi)   ψiΦβψi),

f _   cμμftt    fl - Φ⅛Λ l _ ω fl - Φ⅛Λ l

i   ψi [(1+ δ)+ ψi](^ Φ‰) Ji ( φi(ψ.) J i,

(Allb)

where:
c                                          c                 c..μftt

"-    l + β + δ) - ψi,    ω! W = ψi     f . ψj ,

are the solution coefficients for the Hxed employment case. To solve for the constants
L
i and complete the solution of (AlOa)-(AlOd), we use the fact that the stock of durable
goods and physical capital evolve continuously from their initial conditions, a(O) = a
o and
к (O) = ko. From (AlOb, d) this gives us the two equation system

'a + Ωξ (Wl - Φ*cy) L1 + ⅛ (ψ2)  l - фУ) L2 = ao,   fc + L1 + L2 = ko,

V Φz(ψι) }               V Φ4Ψ2) }

(Al2a)

so that Li, L2 equals:

Φ⅜1)Φ⅜2) [-(a - ao) + ωγ (ψ2) / ;  (k - ko)

Ω1 (ψi) Φr(ψ2) [l - Φr(ψ1)] - Ω2 (Ψ2) Φr(ψi) [l - Φr(ψ2)]

L2 =


∣Φr(ψ1)Φr(ψ2)(a - ao) - Ω1 (ψι) Φr(ψ2)[l - Φr(ψι)](fc - ko)]

Ω1 (ψι) Φr(ψι) [l - Φz(ψι)] - Ω2 (ψ2) Φr(Ψι) [l - Φr(Ψ2)]

(Al2b)


Substitution of equations (Al2b) into (Allb) and the resulting expressions into (AlOa)-
(AlOd) yield the stable solutions for
(φ, a, μ, k) in the Hxed employment case.

32



More intriguing information

1. New Evidence on the Puzzles. Results from Agnostic Identification on Monetary Policy and Exchange Rates.
2. The name is absent
3. Langfristige Wachstumsaussichten der ukrainischen Wirtschaft : Potenziale und Barrieren
4. Robust Econometrics
5. EFFICIENCY LOSS AND TRADABLE PERMITS
6. AGRIBUSINESS EXECUTIVE EDUCATION AND KNOWLEDGE EXCHANGE: NEW MECHANISMS OF KNOWLEDGE MANAGEMENT INVOLVING THE UNIVERSITY, PRIVATE FIRM STAKEHOLDERS AND PUBLIC SECTOR
7. The name is absent
8. Transfer from primary school to secondary school
9. Concerns for Equity and the Optimal Co-Payments for Publicly Provided Health Care
10. The name is absent