The marginal propensity to consume and multidimensional risk

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-denite.

MoreLess

Year of publication:	2013-05-01
Authors:	Jouini, Elyès ; Napp, Clotilde ; Nocetti, Diego
Institutions:	HAL
Subject:	Marginal propensity to consume \| Multivariate risk \| Prudence

More details

Extent:	application/pdf
Series:	Post-Print.
Type of publication:	Book / Working Paper
Notes:	View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00927262 Published, Economics Letters, 2013, 119, 2, 124-127
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010899217