A note on conspicuous leisure, animal spirits and endogenous cycles
This paper investigates general equilibrium effects of conspicuous leisure. It finds that leisure externalities reduce the degree of other market im- perfections needed to generate indeterminacy or sunspot equilibria – endogneous cycles become empirically more plausible. Sunspot equilibria are possi...
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| Format: | article |
| Language: | eng |
| Published: |
2018
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| Online Access: | http://hdl.handle.net/10400.5/15486 |
| Country: | Portugal |
| Oai: | oai:www.repository.utl.pt:10400.5/15486 |
| Summary: | This paper investigates general equilibrium effects of conspicuous leisure. It finds that leisure externalities reduce the degree of other market im- perfections needed to generate indeterminacy or sunspot equilibria – endogneous cycles become empirically more plausible. Sunspot equilibria are possible with a downward-sloping labor demand schedule. The economic reasoning behind the result is that with conspicuous-externalities, labor is drawn more easily in and out of leisure to help fulfill agents’ expectations. |
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