Showing 1 - 10 of 32
In this article, we show how to analyse analytically the equilibrium policies and prices in an economy with a stochastic investment opportunity set and incomplete financial markets, when agents have power utility over both intermediate consumption and terminal wealth, and face portfolio...
Persistent link: https://www.econbiz.de/10005504284
The 1991 Italian Survey of Household Income and Wealth contains detailed information on how respondents acquired their …
Persistent link: https://www.econbiz.de/10005504649
aggregate consumption as well. The positive effects of income taxation are analysed and the optimal allocation scheme when …
Persistent link: https://www.econbiz.de/10005497883
In this paper we study the transmission of income shocks into nondurable consumption in the presence of durable goods … substitution between durable and non-durable goods upon arrival of an unexpected income change. This substitution biases the … conventional measures of insurance based on the response of non-durable consumption to income changes. The sign of this bias …
Persistent link: https://www.econbiz.de/10011084596
We compare the performance of markets and tournaments as allocative mechanisms in an economy with borrowing constraints. The model consists of a continuum of individuals who differ in their initial wealth and ability level (e.g. students) and that are to be assigned to a continuum of investment...
Persistent link: https://www.econbiz.de/10005656414
We show theoretically that income redistribution benefits borrowing-constrained individuals more than is implied by … standard relative-income and uninsurable-risk considerations. Empirically, we find in international opinion-survey data that … younger and lower-income individuals express stronger support for government redistribution in countries where consumer credit …
Persistent link: https://www.econbiz.de/10005666473
We propose a multi-period model in which competitive arbitrageurs exploit discrepancies between the prices of two identical risky assets, traded in segmented markets. Arbitrageurs need to collateralize separately their positions in each asset, and this implies a financial constraint limiting...
Persistent link: https://www.econbiz.de/10005666703
The extent of entrepreneurial activity in an economy with poorly developed capital markets depends on the distribution of wealth, though in potentially complex ways. A non-parametric model of the wealth effect on self-employment is estimated using micro data on the occupational choices of return...
Persistent link: https://www.econbiz.de/10005124477
Financial well-being is distinct from income. Some people with high incomes suffer low financial well-being, as their … aspirations. We find that people whose aspirations exceed their income are less risk-averse and less loss-averse than people whose …
Persistent link: https://www.econbiz.de/10011083480
their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that … only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of … absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in …
Persistent link: https://www.econbiz.de/10011083711