We consider a broad class of intertemporal economic problems and characterize the short-run and long-run responses of the demand for a good to a permanent increase in its market price. Depending on the interplay between self-productivity and time discount- ing, we show that dynamic substitution effects can generate price elasticities of opposite signs in the short run and in the long run.

Substitution Effects in Intertemporal Problems / Dragone D.; Vanin P.. - In: AMERICAN ECONOMIC JOURNAL: MICROECONOMICS. - ISSN 1945-7669. - STAMPA. - 14:3(2022), pp. 791-809. [10.1257/mic.20200121]

Substitution Effects in Intertemporal Problems

Dragone D.;Vanin P.
2022

Abstract

We consider a broad class of intertemporal economic problems and characterize the short-run and long-run responses of the demand for a good to a permanent increase in its market price. Depending on the interplay between self-productivity and time discount- ing, we show that dynamic substitution effects can generate price elasticities of opposite signs in the short run and in the long run.
2022
Substitution Effects in Intertemporal Problems / Dragone D.; Vanin P.. - In: AMERICAN ECONOMIC JOURNAL: MICROECONOMICS. - ISSN 1945-7669. - STAMPA. - 14:3(2022), pp. 791-809. [10.1257/mic.20200121]
Dragone D.; Vanin P.
File in questo prodotto:
File Dimensione Formato  
DV22AEJMicro_Substitution Effects in Intertemporal Problems_published.pdf

accesso riservato

Descrizione: published article
Tipo: Versione (PDF) editoriale
Licenza: Licenza per accesso riservato
Dimensione 654.37 kB
Formato Adobe PDF
654.37 kB Adobe PDF   Visualizza/Apri   Contatta l'autore

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/893414
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 4
  • ???jsp.display-item.citation.isi??? 2
social impact