This paper examines how aversion to risk and aversion to intertemporal substitution determine the strength of the precautionary saving motive in a two-period model with Selden/Kreps-Porteus preferences. For small risks, we derive a measure of the strength of the precautionary saving motive which...

This study examines the market and price behavior is the supreme problem of commodity investors and trader. The present study spotlights the price behavior/movement and market behavior/volatile in Indian agricultural commodity market (MCX). The study aims to study the volatility and caused...

We assess the importance of the precautionary saving motive by relying on a direct question about precautionary wealth from the 1995 and 1998 waves of the Survey of Consumer Finances. In this survey, a new question has been designed to elicit the amount of desired precautionary wealth. This...

This paper revisits monetary policy in a heterogeneous agent New Keynesian model where agents use an adaptive learning strategy named recursive least square learning in order to form their expectations. Due to the households' finite heterogeneity triggered by idiosyncratic unemployment risk, the...

Economists working with numerical solutions to the optimal consumption/saving problem under uncertainty have long known that there are quantitatively important interactions between liquidity constraints and precautionary saving behavior. This paper provides the analytical basis for those...

We show that there is a distinct commodity-related driver of exchange rate movements, even at fairly high frequencies. Commodity prices predict exchange rate movements of eleven commodity-exporting countries in an in-sample panel setting for horizons up to two months. We also find evidence of...

One way to analyze the impact of commodity price shocks on monetary policy is to think about short-term interest rates set by the Federal Reserve (Fed) according to the Taylor rule. Taylor (1993) suggested a policy reaction function for moderating short-term interest rates to achieve the...

This paper reviews the more recent literature addressing different facets of speculation in commodity markets, including the role of speculators and the impact that financialization in recent years. While speculation and financialization can theoretically destabilize commodity markets, the...