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We use a welfare-based intertemporal stochastic optimization model and historical data to estimate the size of the optimal intergenerational and liquidity funds and the corresponding resource dividend available to the government of the Canadian province Alberta. To first-order of approximation,...
Persistent link: https://www.econbiz.de/10011541123
We use a welfare-based intertemporal stochastic optimization model and historical data to estimate the size of the optimal intergenerational and liquidity funds and the corresponding resource dividend available to the government of the Canadian province Alberta. To first-order of approximation,...
Persistent link: https://www.econbiz.de/10012979602
The more a country saves, the less it invests as a share of saving. We build a “store-or-sow” model of growth with … precautionary saving and investment to study the nonlinear relationship between investment and saving. We contend that income … volatility is an important variable for explaining saving and investment dynamics. Our results indicate that as permanent …
Persistent link: https://www.econbiz.de/10013124202
We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store …-or-sow" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low … leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks. Empirical …
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This paper analyzes how the combination of borrowing constraints and idiosyncratic risk affects the equity premium in an overlapping generations economy. I find that introducing a zero-borrowing constraint in an economy without idiosyncratic risk increases the equity premium by 70 percent, which...
Persistent link: https://www.econbiz.de/10011900994
This paper investigates the effects of housing price risk on housing choices over the lifecycle. Housing price risk can …
Persistent link: https://www.econbiz.de/10009006946