On the stability of the constant relative risk aversion (CRRA) utility under high degrees of uncertainty

Growth models under uncertainty and constant relative risk aversion (CRRA) utility are fragile in explaining consumers’ choice, as equilibrium consumption is dependent on distributional assumptions. We show that, under semi-nonparametric distributions, general equilibrium models are stable, as the existence of expected utility is guaranteed.

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Year of publication:	2012
Authors:	Ñíguez, Trino-Manuel ; Paya, Ivan ; Peel, David ; Perote, Javier
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 115.2012, 2, p. 244-248
Publisher:	Elsevier
Subject:	Bayesian learning \| Rational expectations \| Semi-nonparametric distributions

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Type of publication:	Article
Classification:	D80 - Information and Uncertainty. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011041665