A reconciliation of two alternative approaches towards buffer stock saving
AbstractThis paper shows that the two main models in the buffer stock saving literature can be nested in a model that varies the level of available social insurance. Equivalently, the assumption about the time series process for labor income (and social insurance during unemployment) is crucial in determining the level (but not the shape) of optimal consumption as a function of liquid wealth.
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Bibliographic InfoPaper provided by London School of Economics and Political Science in its series Open Access publications from London School of Economics and Political Science with number http://eprints.lse.ac.uk/194/.
Date of creation: Apr 2003
Date of revision:
Publication status: Published in Economics letters (2003-04) v.79, p.137-143
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Other versions of this item:
- Michaelides, Alexander, 2003. "A reconciliation of two alternative approaches towards buffer stock saving," Economics Letters, Elsevier, vol. 79(1), pages 137-143, April.
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- repec:hal:wpaper:halshs-00585994 is not listed on IDEAS
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