کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
9555874 | 1377039 | 2005 | 41 صفحه PDF | دانلود رایگان |
عنوان انگلیسی مقاله ISI
Second-, third-, and higher-order consumption functions: a precautionary tale
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کلمات کلیدی
موضوعات مرتبط
مهندسی و علوم پایه
ریاضیات
کنترل و بهینه سازی
پیش نمایش صفحه اول مقاله
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چکیده انگلیسی
No analytic solution exists to the consumption problem of an agent who faces uninsurable income shocks, though perturbation methods can be used to derive approximate solutions. This paper shows it is straightforward to extend the well-known second-order consumption function to third order. However, for every n there is a threshold interest rate below which the nth-order correction diverges. This puts a bound on the accuracy that can be achieved with perturbation methods. Even a second-order consumption function can perform spectacularly worse than a zeroth-order function that disregards precautionary saving, and this cannot be rectified by going to higher orders.
ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Journal of Economic Dynamics and Control - Volume 29, Issue 8, August 2005, Pages 1385-1425
Journal: Journal of Economic Dynamics and Control - Volume 29, Issue 8, August 2005, Pages 1385-1425
نویسندگان
James Feigenbaum,