Analytical Results for a Model of Periodic Consumption
This paper presents the partial analytical solution to a model of periodic consumption that incorporates imperfect capital markets and uncertainty. Our model assumes that consumption decisions occur more frequently than income receipts. We show that the week-specific consumption functions can be ordered. At low levels of wealth these functions exhibit a ‘‘u-shaped’’ pattern between income receipts. We show analytically that changes in the level of the borrowing constraint affect only the level of consumption function and not the MPC, whilst mean-preserving changes in uncertainty affect both.
|Date of creation:||Apr 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
Web page: http://www.keele.ac.uk/depts/ec/cer/
More information through EDIRC
|Order Information:|| Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom|
Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mason, R. & Wright, S., 1999.
"The effects of uncertainty on optimal consumption,"
Discussion Paper Series In Economics And Econometrics
9907, Economics Division, School of Social Sciences, University of Southampton.
- Roy Bailey and Marcus Chambers, .
"A Theory of Commodity Price Fluctuations,"
Economics Discussion Papers
432, University of Essex, Department of Economics.
- Clare Kelly & Gauthier Lanot, 2002.
"Consumption Patterns over Pay Periods,"
- Kelly, Clare & Gauthier Lanot, 2002. "Consumption Patterns Over Pay Periods," The Warwick Economics Research Paper Series (TWERPS) 656, University of Warwick, Department of Economics.
- Clare Kelly & Gauthier Lanot, 2002. "Consumption Patterns over Pay Periods," Keele Economics Research Papers KERP 2002/14, Centre for Economic Research, Keele University.
- Kelly, Clare & Gauthier Lanot, 2002. "Consumption Patterns over Pay Periods," Royal Economic Society Annual Conference 2002 112, Royal Economic Society.
- Christopher D. Carroll & Miles S. Kimball, 1995.
"On the Concavity of the Consumption Function,"
- Deaton, Angus, 1991.
"Saving and Liquidity Constraints,"
Econometric Society, vol. 59(5), pages 1221-48, September.
- Christopher D. Carroll, 2001.
"A Theory of the Consumption Function, with and without Liquidity Constraints,"
Journal of Economic Perspectives,
American Economic Association, vol. 15(3), pages 23-45, Summer.
- Christopher D. Carroll, 2001. "Codes for A Theory of the Consumption Function, With and Without Liquidity Constraints," QM&RBC Codes 37, Quantitative Macroeconomics & Real Business Cycles.
- Christopher D. Carroll, 2001. "A Theory of the Consumption Function, With and Without Liquidity Constraints (Expanded Version)," NBER Working Papers 8387, National Bureau of Economic Research, Inc.
- Deaton, Angus & Laroque, Guy, 1996. "Competitive Storage and Commodity Price Dynamics," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 896-923, October.
- Christopher D Carroll & Miles S Kimball, 2001.
"Liquidity Constraints and Precautionary Saving,"
Economics Working Paper Archive
455, The Johns Hopkins University,Department of Economics.
- Rabault, Guillaume, 2002. "When do borrowing constraints bind? Some new results on the income fluctuation problem," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 217-245, February.
- Stephen Zeldes, .
"Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence,"
Rodney L. White Center for Financial Research Working Papers
20-86, Wharton School Rodney L. White Center for Financial Research.
- Zeldes, Stephen P, 1989. "Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 275-98, May.
When requesting a correction, please mention this item's handle: RePEc:kee:kerpuk:2003/01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin E. Diedrich)The email address of this maintainer does not seem to be valid anymore. Please ask Martin E. Diedrich to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.