Tsoukis, Christopher and Tournemaine, Frederic (2010): Status in a canonical macro model: labour supply, growth, and inequality.
Download (477kB) | Preview
We introduce status in the most standard (canonical) macro model that is able to provide an analysis of growth and distribution. We consider the question of whether status considerations enable the model to meet some important empirical findings (which we review) related to rising labour supply (the work-life balance), rising income inequality, and changing factor shares. We find a promising role for status in the explanation of these empirical regularities.
|Item Type:||MPRA Paper|
|Original Title:||Status in a canonical macro model: labour supply, growth, and inequality|
|Keywords:||Status, growth, inequality, labour supply, social/behavioural macroeconomics|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E25 - Aggregate Factor Income Distribution
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth
|Depositing User:||Christopher Tsoukis|
|Date Deposited:||08. Nov 2010 13:47|
|Last Modified:||31. Dec 2015 19:28|
Abel, A. (1990). Asset Pricing under Habit Formation and Catching up with the Joneses, American Economic Review, 80, 2, pp. 38-42.
Akerlof, G.A. and R.B. Shiller (2009). Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, Princeton, NJ: Princeton University Press.
Alesina, A. and D. Rodrik (1994). Distributive Politics and Economic Growth, Quarterly Journal of Economics, 109, pp. 465-90.
Alesina, A., R. Di Tella, and R. MacCulloch (2004). Inequality and Happiness: Are Europeans and Americans Different?, Journal of Public Economics, 88, pp. 2009-2042.
Alesina, A., E. Glaeser and B. Sacerdote (2005). Work and Leisure in the U.S. and Europe: Why So Different?, NBER Macroeconomic Annual 2005, 1-64.
Alonso-Carrera, J., J. Caballé and X. Raurich (2004). Consumption Externalities, Habit Formation and Equilibrium Efficiency, Scandinavian Journal of Economics, 106, pp. 231-251.
Alvarez-Cuadrado, F., G. Monteiro and S. Turnovsky (2004). Habit Formation, Catching Up with the Joneses, and Economic Growth, Journal of Economic Growth, 9, pp. 47-80.
Aronson, E.. T.D. Wilson and R.M. Akert (1994). Social Psychology: The Heart and the Mind, New York: Harper Collins.
Autor, D.H., L.F. Katz and M.S. Kearney (2008). Trends in U.S. Wage Inequality: Revising the Revisionists, The Review of Economics and Statistics, MIT Press, 90, pp. 300-323, 06.
Bertola, G. (1993). Factor Shares and Savings in Endogenous Growth, American Economic Review, 83, pp. 1184-98.
Bilancini, E. and L. Boncinelli (2008). Ordinal vs cardinal status: Two examples, Economics Letters, 101 , pp. 17-19.
Blanchard, O. (1997). The Medium Run, Brookings Papers on Economic Activity, 2, pp. 89-158.
Blanchard, O. (2004).The Economic Future of Europe Journal of Economic Perspectives, 18, pp. 3-26.
Blanchard, O. and F. Giavazzi (2003). Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets, Quarterly Journal of Economics, 118, pp. 879-907.
Boskin, M.J. and E. Sheshinki (1978). Optimal Redistributive Taxation when Individual Welfare Depends upon Relative Income, Quarterly Journal of Economics, 92, pp 589-601. 22
Brewer, M.B. and W.D.Crano (1994). Social Psychology, Minneapolis/St. Paul: West Publishing Company.
Caporale, Guglielmo M., Y. Georgellis, N. Tsitsianis, and Y. Ping Yin (2007). Income and happiness across Europe: Do reference values matter?, Brunel University, mimeo.
Carroll, C.D., J. Overland, and D.N. Weil (1997). Comparison Utility in a Growth Model. Journal of Economic Growth, 2, pp. 339-367.
Chen S., and M. Ravallion (1997). What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?, The World Bank Economic Review, 11, pp. 357-382.
Clark, A.E. and A.J. Oswald (1996). Satisfaction and Comparison Income, Journal of Public Economics, 61, pp. 359-81,
Clark, A.E. and A.J. Oswald (1998). Comparison-Concave utility and following behaviour in social and economic settings, Journal of Public Economics, 70, pp. 133-155.
Clark, A.E., P. Frijters and M. Shields (2008). Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles, Journal of Economic Literature, 46, pp. 95-144
Choudhary, M.A. and P. Levine (2006). Idle worship, Economics Letters, 90, pp. 77-83.
Constantinides, G.M. (1990). Habit Formation as a Resolution of the Equity Premium Puzzle, Journal of Political Economy, 98, pp. 519-43.
Corneo, G. and O. Jeanne (1997). On relative wealth effects and the optimality of growth, Economics letters, 54, pp. 87-92.
Corneo, G. and O. Jeanne (2001). Status, the Distribution of Wealth, and Growth, Scandinavian Journal of Economics, 103, pp. 283-293.
Deninger K., and L. Squire (1996). A New Data Set Measuring Income Inequality, The World Bank Economic Review, 10, pp. 565-591.
Dixon, H.D. (2000). Keeping Up with the Joneses: Competition and the Evolution of Collusion, Journal of Economic Behavior and Organization, 43, pp. 223-38.
Dynan, K. and E. Ravina (2007). Increasing Income Inequality, External Habits, and Self-Reported Happiness, American Economic Review, P&P, May 2007
Easterlin, R.A. (2001). Income and Happiness: Towards a Unified Theory, Economic Journal, 111, pp. 465-84.
Ferrer-i-Carbonell, A. (2005). Income and well-being: an empirical analysis of the comparison income effect, Journal of Public Economics, 89, pp. 997-1019.
Festinger, L. (1954). A theory of social comparison processes, Human Relations, 7, pp. 117-40. Frey, B.S. and A. Stutzer (2002). What Can Economists Learn from Happiness Research? Journal of Economic Literature, 40, pp. 402–435
Futagami, K. and A. Shibata (1998). Keeping one Step ahead of the Joneses: Status, the Distribution of Wealth and Long Run Growth, Journal of Economic Behavior and Organization, 36, pp. 109-126.
Gali, J. (1994). Keeping up with the Joneses: Consumption Externalities, Portfolio Choice, and Asset Prices, Journal of Money, Credit and Banking, 26, pp. 1-8.
Gollin D. (2002). Getting Income Shares Right, Journal of Political Economy, 110, pp. 458-474.
Hamermesh, D.S. and J.B. Slemrod (2008). The Economics of Workaholism: We Should Not Have Worked on This Paper, The B.E. Journal of Economic Analysis & Policy, 8, (Contributions), Article 3.
Hopkins, E. and T. Kornienko (2004). Running to Keep in the Same Place: Consumer Choice as a Game of Status, American Economic Review, 94, pp. 1085-1107.
Hopkins, E. and T. Kornienko (2006). Status, Inequality and Growth, University of Stirling, mimeo.
Jung, Y. (2004). Catching Up with the Joneses in a Sticky Price Model, Journal of Money, Credit, and Banking, 36, pp. 73-93.
Kahneman, D., J.L. Knetch and R. Thaler (1986). Fairness a s a constraint on profit seeking: Entitlements in the market, American Economic Review, 76, pp. 728-41. 23
King, R., C. Plosser and S. Rebelo (1988). Production Growth and Business Cycles I. The Basic Neoclassical Model, Journal of Monetary Economics, 21, pp. 195-232.
Krugman, P. (2007). The Concience of a Liberal: Reclaiming America from the Right, London Allen Lane (Penguin).
Levy, F. and P. Temin (2007). Inequality And Institutions In 20th Century America, Massachusetts Institute of Technology, Department of Economics, Working Paper 07-17, Revised: June 2007.
Ljungqvist, L. and H. Uhlig (2000). Tax Policy and Aggregate Demand Management Under Catching Up with the Joneses, American Economic Review, 90, pp. 356-66.
Maurer, J. and A. Meier (2008). Smooth it like the ‘Joneses’? Estimating peer-group effects in intertemporal consumption choice, Economic Journal, 118, pp 454-76.
McBride, M. (2001). Relative-income effects on subjective well-being in the cross-section. Journal of Economic Behavior and Organization, 45, 251-78.
Nickell, S. (1997). Unemployment and Labor Market Rigidities: Europe versus North America, Journal of Economic Perspectives, 11, pp. 55-74.
Oswald, A. (1997). Happiness and Economic Performance, Economic Journal, 107, pp. 1815-1831.
Partridge M. (1997). Is Inequality Harmful For Growth? Comment, American Economic Review, 87, pp. 1019-1032.
Perotti, R. (1996). Growth, Income Distribution, and Democracy: What the Data Say, Journal of Economic Growth, 1, pp. 149-187.
Persson, T. and G. Tabellini (1994). Is Inequality Harmful for Growth?, American Economic Review, 84, pp. 600-621.
Piketty, T. and E. Saez. (2003). Income Inequality in the United States. The Quarterly Journal of Economics, 118, pp. 1-39.
Piketty, T. and E. Saez (2006). The Evolution of Top Incomes: A Historical and International Perspective, American Economic Review, P&P, 96, pp. 200-205.
Prescott E.C. (2004). Why Do Americans Work So Much More Than Europeans? Federal Reserve Bank of Minneapolis Quarterly Review, 28, pp. 2–13
Romer, P.M., (1989). Capital Accumulation in the Theory of Long Run Growth,, in Robert J. Barro (ed.), Modern Business Cycle Theory, Cambridge: Harvard University Press.
Senik, C. (2007). Direct evidence on income comparisons and their welfare effects, Paris School of Economics Working Paper no. 2007-19, forthcoming, Journal of Economic Behavior and Organization.
Tanzi, V. and L. Schuknecht (2000). Public Spending in the 20th Century: A Global Perspective, Cambridge: CUP.
Tournemaine, F. (2008). Social aspirations and choice of fertility: why can status motive reduce per-capita growth?, Journal of Population Economics, 21, pp. 49-66.
Tournemaine F. and C. Tsoukis (2008). Relative Consumption, Relative Wealth and Growth, Economics Letters, 100, pp. 314-316.
Tournemaine F. and C. Tsoukis (2009). Status Jobs, Human Capital and Growth: the Effects of Heterogeneity, Oxford Economic Papers, 61, pp. 467-493.
Tournemaine F. and C. Tsoukis (2010). Gain versus Pain from Status and Ambition: Effects on Growth and Inequality, Journal of Socio-Economics, 39, pp. 286-294.
Tsoukis, C. (2007). Keeping Up with the Joneses, Growth and Distribution, Scottish Journal of Political Economy, 54, pp. 575-600.
Tversky, A. and D. Kahneman (1991). Loss aversion in riskless choice: A reference-dependent model. Journal of Economic Literature, 106, pp. 1039-61. 24