I thank the editor for his diligence.
Multiple BGPs in a Growth Model with Habit Persistence: A Comment
Article first published online: 22 JAN 2009
© 2009 The Ohio State University
Journal of Money, Credit and Banking
Volume 41, Issue 1, pages 189–195, February 2009
How to Cite
TOCHE, P. (2009), Multiple BGPs in a Growth Model with Habit Persistence: A Comment. Journal of Money, Credit and Banking, 41: 189–195. doi: 10.1111/j.1538-4616.2008.00192.x
- Issue published online: 22 JAN 2009
- Article first published online: 22 JAN 2009
- Received April 24, 2007; and accepted in revised form July 24, 2008.
- habit formation;
- relative consumption;
Recently in this journal, Chen (2007) analyzes a model of an economy without distortions in which rational forward-looking households care about how their current consumption compares with their own past consumption. Chen claims the existence of two saddle-point stable balanced growth paths. In this comment, I show that the claim is incorrect. There is a unique saddle-point stable balanced growth path and no global indeterminacy.