Target Saving in an Overlapping Generations Model
AbstractWe examine a model in which the utility function has been engineered so that it is optimal for consumers to aim for a fixed target level of retirement resources. In this case, consumption displays excess sensitivity to current income as well as perfect old age insurance. In an overlapping generations model, this leads naturally to multiple and unstable equilibria. Under static expectations, it also leads to a well-defined dynamics, including possible historical traps, implosions involving ever-diminishing capital stock and ever-increasing interest rates, and the feasibility of optimal one-time interventions.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.
Volume (Year): 8 (2008)
Issue (Month): 1 (March)
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Web page: http://www.degruyter.com
Other versions of this item:
- Ashok S. Guha & Brishti Guha, 2008. "Target Saving In An Overlapping Generations Model," Working Papers 01-2008, Singapore Management University, School of Economics.
- Ashok S. Guha & Brishti Guha, 2008. "Target Saving In An Overlapping Generations Model," Macroeconomics Working Papers 22433, East Asian Bureau of Economic Research.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
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- repec:ebl:ecbull:v:4:y:2008:i:30:p:1-4 is not listed on IDEAS
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