Title of article :
Precautionarysavingandthemarginalpropensitytoconsumeoutof
permanentincome
Author/Authors :
ChristopherD.Carroll، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Abstract :
The budgetconstraintrequiresthat,eventually,consumptionmustadjustfullytoany
permanentshocktoincome.Intuitionsuggeststhat,knowingthis,optimizingagents
willfullyadjusttheirspendingimmediatelyuponexperiencingapermanentshock.
However,thispapershowsthatifconsumersareimpatientandaresubjecttotransitory
as wellaspermanentshocks,theoptimalmarginalpropensitytoconsumeoutof
permanentshocks(theMPCP)isstrictlylessthanone,becausebuffer-stocksavershave
a targetwealth-to-permanent-income ratio; apositiveshocktopermanentincome
movestheratiobelowitstarget,temporarilyboostingsaving
Keywords :
RiskUncertaintyConsumptionPrecautionary savingBuffer-stocksavingPermanent incomehypothesis
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
