Consumption smoothing and liquidity income redistribution
We show theoretically that income redistribution benefits borrowingconstrained individuals more than is implied by standard relative-income and uninsurable-risk considerations. Empirically, we find in international opinion-survey data that younger and lower-income individuals express stronger support for government redistribution in countries where consumer credit is less easily available. This evidence supports our theoretical perspective if such individuals are more strongly affected by tighter credit supply, in that expectations of higher incomes in the future increase their propensity to borrow. JEL Classification: E21
| Author: | Giuseppe Bertola, Winfried Koeniger |
|---|---|
| URN: | urn:nbn:de:hebis:30-38088 |
| Series (Serial Number) | CFS working paper series (2006, 34) |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 23.02.2007 |
| Year of first Publication: | 2006 |
| Publishing Institution: | Univ.-Bibliothek Frankfurt am Main |
| Tag: | Consumption ; Smoothing |
| HeBIS PPN: | 190330236 |
| Institutes: | Center for Financial Studies (CFS) |
| Dewey Decimal Classification: | 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Veröffentlichungsvertrag für Publikationen ohne Print on Demand |
