A tractable model of buffer stock saving

We present a tractable model of the effects of nonfinancial risk on intertemporal choice. Our purpose is to provide a simple framework that can be adopted in fields like representative-agent macroeconomics, corporate fin
We present a tractable model of the effects of nonfinancial risk on intertemporal choice. Our purpose is to provide a simple framework that can be adopted in fields like representative-agent macroeconomics, corporate finance, or political economy, where most modelers have chosen not to incorporate serious nonfinancial risk because available methods were too complex to yield transparent insights. Our model produces an intuitive analytical formula for target assets, and we show how to analyze transition dynamics using a familiar Ramsey-style phase diagram. Despite its starkness, our model captures most of the key implications of nonfinancial risk for intertemporal choice. JEL-Classifications: C61, D11, E24 Keywords: Risk, Uncertainty, Precautionary Saving, Buffer Stock Saving
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Metadaten
Author:Christopher D. Carroll, Patrick Toche
URN:urn:nbn:de:hebis:30-68339
Series (Serial Number):CFS working paper series (2009, 14)
Document Type:Working Paper
Language:English
Date of Publication (online):2009/08/14
Year of first Publication:2009
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2009/08/14
Tag:Buffer Stock Saving; Precautionary Saving ; Risk ; Uncertainty
HeBIS PPN:214924424
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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