University of Surrey

Test tubes in the lab Research in the ATI Dance Research

Reconciling Jaimovich-Rebello Preferences, Habit in Consumption and Labor Supply

Holden, Tom, Levine, Paul and Swarbrick, Jonathan (2018) Reconciling Jaimovich-Rebello Preferences, Habit in Consumption and Labor Supply Economics Letters, 168. pp. 132-137.

[img] Text
EL_Holden_Levine.pdf - Accepted version Manuscript
Restricted to Repository staff only until 25 October 2019.

Download (548kB)


This note studies a form of a utility function of consumption with habit and leisure that (a) is compatible with long-run balanced growth, (b) hits a steady state observed target for hours worked and (c) is consistent with micro-econometric ev- idence for the inter-temporal elasticity of substitution and the Frisch elasticity of labor supply. Employing Jaimovich-Rebello preferences our results highlight a con- straint on the preference parameter needed to target the steady-state Frisch elastic- ity. This leads to a lower bound for the latter that cannot be reconciled empirically with external habit, but the introduction of a labor wedge solves the problem. We also propose a dynamic Frisch inverse elasticity measure and examine its business cycle properties.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Date : 25 April 2018
DOI : 10.1016/j.econlet.2018.04.013
Copyright Disclaimer : © 2018. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Uncontrolled Keywords : Jaimovich-Rebello Preferences, Habit in Consumption, Labor Supply, Dynamic Frisch Elasticity, Labor Wedge
Depositing User : Melanie Hughes
Date Deposited : 09 May 2018 13:42
Last Modified : 19 Jun 2019 08:39

Actions (login required)

View Item View Item


Downloads per month over past year

Information about this web site

© The University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom.
+44 (0)1483 300800