Multiple BGPs in a growth model with habit persistence: a comment

Deskripsi

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. .Printed journal