Download or read book Soft Liquidity Constraints and Precautionary Saving written by Emilio Fernandez-Corugedo and published by . This book was released on 2002 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Soft Liquidity Constraints and Precautionary Saving written by Emilio Fernández Corugedo and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers the implications for consumption and saving behaviour when households are allowed to borrow, but face penalties which increase with the amount borrowed. It shows that the introduction of this type of constraints (soft liquidity constraints) does not lead to consumers behaving very differently from consumers who face constraints which prevent them from borrowing at any time (hard liquidity constraints). However, when hard constraints are relaxed and become soft, the amount of precautionary saving falls.
Download or read book Liquidity Constraints and Precautionary Saving written by and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Liquidity Constraints and Precautionary Saving written by Chris Carroll and published by . This book was released on 2001 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economists working with numerical solutions to the optimal consumption/saving problem under uncertainty have long known that there are quantitatively important interactions between liquidity constraints and precautionary saving behavior. This paper provides the analytical basis for those interactions. First, we explain why the introduction of a liquidity constraint increases the precautionary saving motive around levels of wealth where the constraint becomes binding. Second, we provide a rigorous basis for the oft-noted similarity between the effects of introducing uncertainty and introducing constraints, by showing that in both cases the effects spring from the concavity in the consumption function which either uncertainty or constraints can induce. We further show that consumption function concavity, once created, propagates back to consumption functions in prior periods. Finally, our most surprising result is that the introduction of additional constraints beyond the first one, or the introduction of additional risks beyond a first risk, can actually reduce the precautionary saving motive, because the new constraint or risk can hide' the effects of the preexisting constraints or risks
Download or read book On Aggregate Precautionary Saving written by Mark Huggett and published by . This book was released on 1998 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Volatility Trap written by Reda Cherif and published by International Monetary Fund. This book was released on 2012-05-01 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store-or-sow" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low investment, or a "volatility trap." Namely, big savers invest relatively little. In contrast, low volatility of permanent shocks leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks. Empirical evidence shows a nonlinear relationship between investment and saving and that investment is a hump-shaped function of the volatility of permanent shocks, as predicted by the model.
Download or read book Saving and Liquidity Constraints written by Angus Deaton and published by . This book was released on 1989 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book How Important is Precautionary Saving written by Chris Carroll and published by . This book was released on 1993 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Liquidity Constraints of the Middle Class written by Jeffrey R. Campbell and published by . This book was released on 2018 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Existing evidence from U.S. middle-class households shows that their MPCs out of tax rebates greatly exceed the PIH's prediction and are weakly related to their liquid assets. The standard precautionary-saving model predicts the first fact but counterfactually requires MPCs to decrease with liquid wealth. Evidence from the Survey of Consumer Finances indicates widespread saving in anticipation of major expenditures like home purchases and college education. Adding such savings to the standard precautionary-saving model allows it to generate realistic MPCs for households with liquid wealth: The approaching expenditure simultaneously motivates asset accumulation and raises MPCs by shortening the effective planning horizon.
Download or read book Saving and Liquidity Constraints written by and published by . This book was released on 1989 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Saving growth and liquidity constraints written by Tullio Jappelli and published by . This book was released on 1992 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book A Study of Liquidity Constraints and Precaustionary Savings written by Seung Myung Lee and published by . This book was released on 1995 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book When Expectations Become Aspirations written by Berber Kramer and published by . This book was released on 2015 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: A large body of literature suggests that consumers derive utility from gains and losses relative to a reference point. This paper shows that such reference dependence can affect savings in opposite directions depending on whether people face liquidity constraints. Existing models for wealth and intertemporal choice predict that reference dependence reduces savings but these models abstract from liquidity constraints. Introducing a liquidity constraint, I find that reference dependence can increase optimal savings for people without access to credit. Ex-post, after reference points have been formed, liquidity constraints force consumers to take part of an income loss in early periods, inducing those who are reference dependent to concentrate the full loss in early periods and save in order to eliminate future losses. Further, anticipating a liquidity constraint raises the expected level of future consumption and thus the expectations-based reference point for future periods, creating an ex-ante savings motive. These findings underscore that it is important to account for financial market imperfections when applying or testing reference-dependent models in low-income settings, and potentially explain heterogeneity in how much the poor save when facing binding liquidity constraints.
Download or read book Inequality Consumer Credit and the Saving Puzzle written by Christopher Brown and published by Edward Elgar Publishing. This book was released on 2008-01-01 with total page 199 pages. Available in PDF, EPUB and Kindle. Book excerpt: . . . provides an excellent example of economic analysis using atypical analytical approaches. . . the book is very accessible, especially to readers with some grounding in economics. Mathematical models and empirical evidence are appropriately used and the writing is superb. Advanced undergraduates and graduate students should be able to follow the analysis and will benefit from seeing the alternative analytics at work. Of course economists of all stripes will find something useful in this book as will anyone with a strong interest in understanding the current economic crisis. Richard V. Adkisson, The Social Science Journal For those who do not mind a stimulating read, the book by Christopher Brown, Inequality, Consumer Credit and the Saving Puzzle, is recommended. . . the book is exciting, tracing the causes for the uncommonly low savings rate in American households. . . this book is written in nearly colloquial language and easily understood. It is divided into eight chapters, each of which addresses one theme group, respectively. The author evaluates in detail literary sources, and also examines alternative approaches, but always returns to his line of thought. Relationships that he perceives as important are exemplified through small models. In addition to that, he always attempts to support the central thesis with statistics. In particular, to read those statistics is very exciting. Conclusion: a book definitely worth reading. Friedrich Thießen, Bankhistorisches Archiv Brown makes an important contribution to the field of consumer credit by presenting a broad view of the issues and problems associated with growing consumer credit habits, culture, and institutions. . . This book effectively uses a heterodox methodology, which will appeal to a wide audience of social scientists. Highly recommended. R.H. Scott, Choice Providing much needed context for current events like the sub-prime mortgage crisis, this timely book presents a vision of an economy evolved to greater dependence on consumer credit and analyzes the trade-offs and risks associated with it. While synthesizing the Keynesian theory of consumption with the Institutional theory of habit selection (brought up to date with new knowledge from evolutionary biology and neuroscience), this book represents an in-depth treatment of the macroeconomic dimensions of consumer credit and implications of recent financial innovations from a non-traditional economic approach. Some of the effects of consumer credit dependence include the potential for illiquidity in markets for debt-collateralized securities, sub-prime contagion, or the possibility of a Minsky-type debt deflation episode. The author also argues that a sharp increase in borrowing by US households over the past 20 years, aided by financial innovations such as the securitization of consumer loans and sub-prime lending, have lessened the harmful consequences of income inequality, and that the collapse of personal saving after 1993 is actually a gradual trend of consumer habits conforming to the imperatives of corporatism. The book s primary audience will be academic economists in sympathy with heterodox and pluralist approaches. It sets forth an institutional or top-down theory of household spending behavior that should be of interest to readers in fields such as sociology, consumer or family studies, psychology, or anthropology. Much of the book is technically accessible for non-economists and students.
Download or read book Working Paper Series written by and published by . This book was released on 2001 with total page 620 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Economic Policy Review written by and published by . This book was released on 2002 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Czech journal of economics and finance written by and published by . This book was released on 2004 with total page 614 pages. Available in PDF, EPUB and Kindle. Book excerpt:
