On the concavity of the consumption function

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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 … 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-

Econometrica, Vol. 64, No. 4 (July, 1996), 981-992 - JSTOR

Web1 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 … optech hood hat

Consumption with liquidity constraints: An analytical characterization

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 … 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. WebConsumption 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," … optech galaxy prime

ON THE CONCAVITY OF THE CONSUMPTION FUNCTION

Necessity of hyperbolic absolute risk aversion for the concavity …

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 … 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 … optech aquariusWebNOTES. 1 For the concavity of the consumption function generated by prudence, see Carroll and Kimball [4].. 2 Uncertainty in rate-of-return or labor income can be easily introduced in the model set-up, but will not alter the main implication. Indeed, since the very message of this paper is the concavity of consumption function under deterministic … optech ct surgery

"WebCiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): Zeldes (1989), Carroll (1992; 1993), and others have shown that optimal consumption behavior … " - On the concavity of the consumption function

On the concavity of the consumption function

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 ... 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 …

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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 … 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 …

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 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 …

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 … Webdomains 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.

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 …

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. porthcawl eventsWeb1 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 … optec-usa cross body camera strapWebCarroll 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 … porthcawl events 2022WebWe 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. … optech co. ltdWebConcavity of consumption function remains robust under habit formation. • In general, concavity of consumption function is preserved under a weaker condition. • Under … porthcawl ferryWebConcavity relates to the rate of change of a function's derivative. A function f f is concave up (or upwards) where the derivative f' f ′ is increasing. This is equivalent to the … porthcawl fire stationWebWith the assumption of the concavity of absolute risk tolerance, the concavity of the consumption function has been proved. This result significantly broadens the … porthcawl facts