The marginal propensity to consume and multidimensional risk
Jouini, Elyès; Napp, Clotilde; Nocetti, Diego (2013), The marginal propensity to consume and multidimensional risk, Economics Letters, 119, 2, p. 124-127. http://dx.doi.org/10.1016/j.econlet.2013.02.002
Type
Article accepté pour publication ou publiéExternal document link
https://halshs.archives-ouvertes.fr/halshs-00927262Date
2013Journal name
Economics LettersVolume
119Number
2Publisher
Elsevier
Pages
124-127
Publication identifier
Metadata
Show full item recordAbstract (EN)
Kimball, 1990a and Kimball, 1990b established that income risk increases the marginal propensity to consume if and only if absolute prudence decreases. We characterize decreasing and increasing multivariate prudence and show that a multidimensional risk increases the marginal propensity to consume if and only if absolute prudence decreases with wealth, in the sense that its derivative is negative-definite.Subjects / Keywords
Marginal propensity to consume; Multivariate risk; PrudenceRelated items
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