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Future Targets and Multiple Equilibria

Author

Listed:
  • Ashok S. Guha

    (SMU)

  • Brishti Guha

Abstract

Multiple Pareto-rankable equilibria may obtain in an overlapping generations model where consumers save to reach a fixed target. Existence and uniqueness conditions are discussed. The model displays excess consumption sensitivity to current income and perfect old-age insurance.

Suggested Citation

  • Ashok S. Guha & Brishti Guha, 2005. "Future Targets and Multiple Equilibria," Macroeconomics Working Papers 22423, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:macroe:22423
    as

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    File URL: http://www.eaber.org/node/22423
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    References listed on IDEAS

    as
    1. Manisha Chakrabarty & Anke Schmalenbach, 2002. "The Effect of Current Income on Aggregate Consumption," The Economic and Social Review, Economic and Social Studies, vol. 33(3), pages 297-317.
    2. B. Bhaskara Rao, 2005. "Testing Hall's permanent income hypothesis for a developing country: the case of Fiji," Applied Economics Letters, Taylor & Francis Journals, vol. 12(4), pages 245-248.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    multiple equilibria; saving; overlapping generations; excess sensitivity;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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