On the concavity of the consumption function

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August undefined, 2024

http://repec.org/sce2006/up.5384.1139946134.pdf WebCarroll and Kimball (1996) prove that the consumption function is concave if infinitely-lived risk-averse households have a utility function which exhibits Hyperbolic Absolute Risk …

Necessity of Hyperbolic Absolute Risk Aversion for the Concavity …

Web2 de ago. de 2024 · More or less, yes. Making the right assumption on the shape of the utility function allows you to prove existence or uniqueness of the equilibrium. The exact assumption you need depends on what exactly you are trying to prove and how general you want your result to be. In the case of concavity, it also makes the equilibrium easier to … Web14 de jan. de 2014 · Carroll (1992; 1993) observes that many of the differences can be attributed to the concavity of the consumption function under uncertainty, but he does … how to stack wood for fire

An approximate consumption function - Research Papers in …

Webliquidity constraints generate a concavity in the consumption function. However, ana-lytics of the concavity due to liquidity constraints has remained unknown until recently. Carroll and Kimball (2001) made the –rst important attempt in setting an analytical foundation and showed the concavity of the consumption function when the … WebWe consider an optimal investment problem to maximize expected utility of the terminal wealth, in an illiquid market with search frictions and transaction costs. In the market model, an investor’s attempt of transaction is successful only at arrival times of a Poisson process, and the investor pays proportional transaction costs when the transaction is successful. … Webcome shocks for which the consumption function is convex. Then, I extend the concavity result to dynamic settings and show that concavity is preserved if 11 > and 2 and > 1 2 3:4 Furthermore, if income shocks are independent consumption function is always concave when 1 2: The intuition for my result is as follows. An agent prefers early resolu- how to stack wire shelving

Is intra-household power more balanced in poor households? A …

On the Concavity of the Consumption Function - CORE

Web14 de jan. de 2014 · Carroll (1992; 1993) observes that many of the differences can be attributed to the concavity of the consumption function under uncertainty, but he does not describe the conditions under which the consumption function will be concave. We show that if labor income is stochastic, ... Web1 de dez. de 2024 · Carroll (1992) observes that many of the differences can be attributed to the concavity of the consumption function under uncertainty, but he does not describe the conditions under which the ... reach italia onlus milano how to stacked column excel

"Web7 de set. de 2001 · This paper illustrates the natural role that Hellinger processes can play in solving problems from ¯nance. We propose an extension of the concept of Hellinger process applicable to entropy distance and f-divergence distances, where f is a convex logarithmic function or a convex power function with general order q, 0 6= q < 1. These concepts … " - On the concavity of the consumption function

On the concavity of the consumption function

producer theory - Why are cost functions often assumed to be …

Web(1996) show the concavity of consumption functions in nite horizon problems, which implies asymptotic linearity. However, under certain regularity assump-tions,Toda(2024) shows that HARA is necessary for the concavity of con-sumption functions, implying that establishing asymptotic linearity based on concavity is possible only in very special ... Web10 de out. de 1998 · Abstract. Zeldes (1989), Carroll (1992,1993), and others have shown that optimal consumption behavior for consumers facing income uncertainty can be …

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Web28 de set. de 2024 · Download PDF Abstract: Carroll and Kimball (1996) have shown that, in the class of utility functions that are strictly increasing, strictly concave, and have nonnegative third derivatives, hyperbolic absolute risk aversion (HARA) is sufficient for the concavity of consumption functions in general consumption-saving problems. This … WebThe parameter b governs the degree of concavity of the consumption function. The higher b, the sooner the derivative of approximate consumption function converges to its limit, •. Carroll and Kimball (1996) show that uncertainty reduces consumption for each level of cash-on-hand. So the higher is uncertainty, the larger has to be b.

Web18 de nov. de 2024 · This paper studies the concavity of the consumption function of a habit-forming consumer with convex absolute risk tolerance. Habit formation is … Webfunction, but until now there has been no analytical explanation for the concavity of the consumption function that income uncertainty seemed to induce. The idea that the consumption function is concave is an old one, dating at least to the origin of Keynesian macroeconomics: The General Theory of Employment, Interest, and Money emphasized …

WebDownload Free PDF. On the Concavity of the Consumption Function Christopher D. Carroll Department of Economics The Johns Hopkins University Baltimore, MD 21218 … Webconcavity of the consumption function in the context of infinite horizon, when consumer’s utility is quadratic. Taking a different approach to Carroll and Kimball [2], we directly …

Web28 de set. de 2024 · Carroll (1992) observes that many of the differences can be attributed to the concavity of the consumption function under uncertainty, but he does not …

WebDownloadable (with restrictions)! Carroll and Kimball (1996) have shown that, in the class of utility functions that are strictly increasing, strictly concave, and have nonnegative third derivatives, hyperbolic absolute risk aversion (HARA) is sufficient for the concavity of consumption functions in general consumption-saving problems. This paper shows … reach italianoWebWe show that if labor income is stochastic, the consumption function will be concave for many commonly used utility functions, and if both labor income and capital income are stochastic, the consumption function is concave for an even broader group of utility … reach it ralph 2Web10 de mar. de 1995 · On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints. Shin’ichi Nishiyama, R. Kato. Economics. 2012. This paper demonstrates the concavity of the consumption function of infinitely living households under liquidity constraints who are not prudent—i.e. with a quadratic utility. reach italia burkina fasoWeb1 de jun. de 2024 · Contrary to the results of a standard consumption-saving model with time-separable utility, we show that the consumer’s consumption function can be convex when young and becomes concave when old. These results advance our understanding of the (non-)concavity of consumption function when preferences are not time-separable. how to stage a fashion showWebWith the assumption of the concavity of absolute risk tolerance, the concavity of the consumption function has been proved. This result significantly broadens the … reach ithaca programWeb10 de mar. de 1995 · On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints. Shin’ichi Nishiyama, R. Kato. Economics. 2012. This … how to stage a burnWeb1 de out. de 2012 · Our paper is to consider a finite-horizon model with the time-additive utility and the time varying discount rate. With the assumption of the concavity of … how to stacked column chart excel