In India, the household sector contributes about 80% of Gross Domestic Savings (GDS). The sector's investments are predominant in fixed income bearing instruments or physical assets, and less predominant in financial assets like shares and mutual funds. This paper makes an attempt to analyze the...

We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the...