Working Paper Number
WP #06026, August 2006; Old working paper #12653
Rejuveniles are "grown-ups who cultivate juvenile tastes in products and entertainment". In this note, we study a standard AK growth model of overlapping generations populated by rejuveniles. For our purposes, rejuveniles are old agents who derive utility from "keeping up" their consumption with that of the current young. We find that such cross-generational keeping up is capable of generating interesting equilibrium growth dynamics, including growth cycles. No such growth dynamics is possible either in the baseline model, one where no such generational consumption externality exists, or for almost any other form of keeping up. Steady-state growth in a world with rejuveniles may be higher than that obtained in the baseline model.
Published in European Economic Review, Vol. 52 no. 6 (August 2008): 1055-1071.
Barnett, Richard C. and Bhattacharya, Joydeep, "Rejuveniles and growth" (2006). Economics Working Papers (2002–2016). 160.