ABSTRACT
The essence of life is change. In the contemporary literature of economic growth, the standard approach to preference change in the neoclassical growth theory is assume that the rate of time preference in the Ramsey utility is changeable as consumption level varies. We will review this approach in Section 6.1. Another important issue in economic growth theory is how habit interacts with economic growth and money. This chapter deals with issues related to preference change and habit persistence in monetary growth models.
