On the concavity of the consumption function

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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 … 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 …

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WebWe 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 … 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 … canon mirrorless dslr camera

Necessity of hyperbolic absolute risk aversion for the concavity of ...

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. … 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 … 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 … canon mirrorless for sports

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Web1 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 … Web1 de set. de 2024 · In this paper we provide a novel family of stochastic orders that generalizes second order stochastic dominance, which we call the α, [a, b]-concave stochastic orders.These stochastic orders are generated by a novel set of “very” concave functions where α parameterizes the degree of concavity. The α, [a, b]-concave … canon mirrorless focus modesWeb1 de out. de 2012 · 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 … flagstaff az waterpark

"Web27 de set. de 2007 · Later, it will be shown how closely these functions relate to log-utility and how the latter may be regarded as a special case. In particular, the algorithms that are given later will handle all these functions with minimal modification. Their concavity also guarantees that an optimal solution can be found by gradient ascent. 2.2. " - On the concavity of the consumption function

On the concavity of the consumption function

Webcient for the concavity of consumption functions in general consumption-saving problems. This paper shows that HARA is necessary, implying the concavity of consumption is not a robust prediction outside the HARA class. Keywords: concavity, consumption function, hyperbolic absolute risk aversion, robust predictions. JEL … 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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Web1 de jan. de 2012 · PDF On Jan 1, 2012, Shin-Ichi Nishiyama published On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints Find, read and cite all the research you ... WebOn the Concavity of the Consumption Function. Christopher Carroll and Miles Kimball. Econometrica, 1996, vol. 64, issue 4, 981-92. Date: 1996. References: Add references at …

Websharing function ensues in a straightforward way. Then, parametric global concavity tests are applied against global parametric alternatives. 2 Framework When modeling household consumption behaviour, collective rationnality is a reasonnable assumption to make (Chiappori, 1988; Apps and Rees, 1988; Chiappori and Ekeland, 2006). Rank tests, realized Web1 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 …

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, ... 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 …

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 Aversion (HARA), face income uncertainty, and are prudent. However, the empirical evidence is inconclusive about the importance of income uncertainty for households.

Web10 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. flagstaff az wallpaperWebConsumption and saving decisions are at the heart of both short- and long-run macroeconomic analysis (as well as much of microeconomics). ... Carroll and M. S. Kimball, "On the Concavity of the Consumption Function," … flagstaff az vacation rental homesWebDownloadable! 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. The concavity of the consumption function is closely related to the 3-convexity of the value function. flagstaff az water shortagehttp://repec.org/sce2006/up.5384.1139946134.pdf canon mirrorless for astrophotographyWeb1 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 ... flagstaff az water source canon mirrorless hd340 cameraWebdomains for which even some linear functions (which are both concave and convex) are not continuous. 3 Concavity, Convexity, and Di erentiability. A di erentiable function is concave i it lies on or below the tangent line (or plane, for N>1) at any point. Theorem 6. Let C RN be non-empty, open and convex and let f : C!R be di erentiable. flagstaff az water supply