The marginal propensity to consume and multidimensional risk
Résumé
Kimball (1990) established that income risk increases the marginal propensity to consume if and only if absolute prudence is decreasing. We characterize decreasing and increasing multivariate prudence and we show that a multidimensional risk increases the marginal propensity to consume if and only if a matrix-measure of multivariate prudence decreases with wealth, in the sense that its derivative is negative-de
nite.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)
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