Author: Annamaria Lusardi
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 302
Book Description
Permanent Income, Consumption and Precautionary Saving
Author: Annamaria Lusardi
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 302
Book Description
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 302
Book Description
Precautionary Saving and the Marginal Propensity to Consume Out of Permanent Income
Author: Chris Carroll
Publisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 17
Book Description
Because the budget constraint implies that consumption must eventually fully adjust to permanent shocks, intuition suggests that consumption-smoothers will have an immediate marginal propensity to consume of one out of permanent shocks. However, this paper shows that if consumers are impatient and experience both transitory and permanent income shocks, the immediate marginal propensity to consume out of permanent shocks is strictly less than one, because buffer-stock savers have a target wealth-to-permanent-income ratio; for a consumer starting at the target ratio, a positive shock to permanent income moves their actual wealth- to-permanent-income ratio below the target, temporarily boosting the saving rate
Publisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 17
Book Description
Because the budget constraint implies that consumption must eventually fully adjust to permanent shocks, intuition suggests that consumption-smoothers will have an immediate marginal propensity to consume of one out of permanent shocks. However, this paper shows that if consumers are impatient and experience both transitory and permanent income shocks, the immediate marginal propensity to consume out of permanent shocks is strictly less than one, because buffer-stock savers have a target wealth-to-permanent-income ratio; for a consumer starting at the target ratio, a positive shock to permanent income moves their actual wealth- to-permanent-income ratio below the target, temporarily boosting the saving rate
Earnings Uncertainty and Precautionary Saving
Author: Luigi Guiso
Publisher:
ISBN:
Category : Econometrics
Languages : en
Pages : 58
Book Description
Publisher:
ISBN:
Category : Econometrics
Languages : en
Pages : 58
Book Description
Precautionary Saving and the Marginal Propensity to Consume Out of Permanent Income
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
The National Bureau of Economic Research, Inc. presents an abstract for the paper entitled "Precautionary Saving and the Marginal Propensity to Consume Out of Permanent Income," by Christopher D. Carroll and published April 2001. The paper discusses consumer behavior and saving and the propensity to consume from permanent income. Users may purchase the full text of the paper online.
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
The National Bureau of Economic Research, Inc. presents an abstract for the paper entitled "Precautionary Saving and the Marginal Propensity to Consume Out of Permanent Income," by Christopher D. Carroll and published April 2001. The paper discusses consumer behavior and saving and the propensity to consume from permanent income. Users may purchase the full text of the paper online.
Precautionary saving and the marginal propensity to consume out permanent income
Author: Christopher D. Carroll
Publisher:
ISBN:
Category :
Languages : es
Pages : 17
Book Description
Publisher:
ISBN:
Category :
Languages : es
Pages : 17
Book Description
Precautionary Saving and the Marginal Propensity to Consume
Author: Miles S. Kimball
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 42
Book Description
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 42
Book Description
Heterogeneity and Persistence in Returns to Wealth
Author: Andreas Fagereng
Publisher: International Monetary Fund
ISBN: 1484370066
Category : Business & Economics
Languages : en
Pages : 69
Book Description
We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.
Publisher: International Monetary Fund
ISBN: 1484370066
Category : Business & Economics
Languages : en
Pages : 69
Book Description
We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.
Precautionary Savings and the Permanent Income Hypothesis
Dissecting Saving Dynamics
Author: Mr.Christopher Carroll
Publisher: International Monetary Fund
ISBN: 1475505698
Category : Business & Economics
Languages : en
Pages : 47
Book Description
We argue that the U.S. personal saving rate’s long stability (from the 1960s through the early 1980s), subsequent steady decline (1980s - 2007), and recent substantial increase (2008 - 2011) can all be interpreted using a parsimonious ‘buffer stock’ model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between ‘target’ and actual wealth, with the target wealth determined by credit conditions and uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the saving rate’s long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business-cycle variation.
Publisher: International Monetary Fund
ISBN: 1475505698
Category : Business & Economics
Languages : en
Pages : 47
Book Description
We argue that the U.S. personal saving rate’s long stability (from the 1960s through the early 1980s), subsequent steady decline (1980s - 2007), and recent substantial increase (2008 - 2011) can all be interpreted using a parsimonious ‘buffer stock’ model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between ‘target’ and actual wealth, with the target wealth determined by credit conditions and uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the saving rate’s long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business-cycle variation.
How Important is Precautionary Saving?
Author: Chris Carroll
Publisher:
ISBN:
Category : Economic security
Languages : en
Pages : 70
Book Description
We estimate the fraction of the wealth of a sample of PSID respondents that is held because some households face greater income uncertainty than others. We first derive an equation characterizing the theoretical relationship between wealth and uncertainty in a buffer-stock model of saving. Next, we estimate that equation using PSID data; we find strong evidence that households engage in precautionary saving. Finally, we simulate the wealth distribution that would prevail if all households had the same uncertainty as the lowest-uncertainty group. We find that between 39 and 46 percent of wealth in our sample is attributable to uncertainty differentials across groups.
Publisher:
ISBN:
Category : Economic security
Languages : en
Pages : 70
Book Description
We estimate the fraction of the wealth of a sample of PSID respondents that is held because some households face greater income uncertainty than others. We first derive an equation characterizing the theoretical relationship between wealth and uncertainty in a buffer-stock model of saving. Next, we estimate that equation using PSID data; we find strong evidence that households engage in precautionary saving. Finally, we simulate the wealth distribution that would prevail if all households had the same uncertainty as the lowest-uncertainty group. We find that between 39 and 46 percent of wealth in our sample is attributable to uncertainty differentials across groups.