On the concavity of the consumption function

Web(1996) show the concavity of consumption functions in nite horizon problems, which implies asymptotic linearity. However, under certain regularity assump-tions,Toda(2024) shows that HARA is necessary for the concavity of con-sumption functions, implying that establishing asymptotic linearity based on concavity is possible only in very special ... Web1 de out. de 2012 · Our paper is to consider a finite-horizon model with the time-additive utility and the time varying discount rate. With the assumption of the concavity of …

Why are utility functions typically assumed to be concave?

Web10 de mar. de 1995 · On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints. Shin’ichi Nishiyama, R. Kato. Economics. 2012. This … Web28 de set. de 2024 · Download PDF Abstract: Carroll and Kimball (1996) have shown that, in the class of utility functions that are strictly increasing, strictly concave, and have nonnegative third derivatives, hyperbolic absolute risk aversion (HARA) is sufficient for the concavity of consumption functions in general consumption-saving problems. This … optim-r review https://cbrandassociates.net

On the concavity of the consumption function with the time v

WebWe consider an optimal investment problem to maximize expected utility of the terminal wealth, in an illiquid market with search frictions and transaction costs. In the market model, an investor’s attempt of transaction is successful only at arrival times of a Poisson process, and the investor pays proportional transaction costs when the transaction is successful. … Web7 de set. de 2001 · This paper illustrates the natural role that Hellinger processes can play in solving problems from ¯nance. We propose an extension of the concept of Hellinger process applicable to entropy distance and f-divergence distances, where f is a convex logarithmic function or a convex power function with general order q, 0 6= q < 1. These concepts … Webfunction, but until now there has been no analytical explanation for the concavity of the consumption function that income uncertainty seemed to induce. The idea that the consumption function is concave is an old one, dating at least to the origin of Keynesian macroeconomics: The General Theory of Employment, Interest, and Money emphasized … optim-eyes filorga

Concavity review (article) Khan Academy

Category:Concave and Convex Functions - Department of Mathematics

Tags:On the concavity of the consumption function

On the concavity of the consumption function

On the Concavity of the Consumption Function

WebOn the concavity of the consumption function. On the concavity of the consumption function. Miles Kimball. 1995, Research Papers in Economics. Continue Reading …

On the concavity of the consumption function

Did you know?

Webconcavity of the consumption function in the context of infinite horizon, when consumer’s utility is quadratic. Taking a different approach to Carroll and Kimball [2], we directly … Webliquidity constraints generate a concavity in the consumption function. However, ana-lytics of the concavity due to liquidity constraints has remained unknown until recently. Carroll and Kimball (2001) made the –rst important attempt in setting an analytical foundation and showed the concavity of the consumption function when the …

Web27 de set. de 2007 · Later, it will be shown how closely these functions relate to log-utility and how the latter may be regarded as a special case. In particular, the algorithms that are given later will handle all these functions with minimal modification. Their concavity also guarantees that an optimal solution can be found by gradient ascent. 2.2. WebWe show that if labor income is stochastic, the consumption function will be concave for many commonly used utility functions, and if both labor income and capital income are stochastic, the consumption function is concave for an even broader group of utility …

WebThe ultimate goal is to define the social equilibrium set which will be the main object of study of this paper. 2.1 Commodity space and consumption space The commodity space will be any Banach lattice B equipped with a norm k · k, and with a partial order ≥ . The consumption set will be B+ = {x ∈ B : x ≥ 0}, the positive cone of B. WebDownload Free PDF. On the Concavity of the Consumption Function Christopher D. Carroll Department of Economics The Johns Hopkins University Baltimore, MD 21218 …

WebCarroll and Kimball (1996) prove that the consumption function is concave if infinitely-lived risk-averse households have a utility function which exhibits Hyperbolic Absolute Risk …

Web1 de jun. de 2024 · Contrary to the results of a standard consumption-saving model with time-separable utility, we show that the consumer’s consumption function can be convex when young and becomes concave when old. These results advance our understanding of the (non-)concavity of consumption function when preferences are not time-separable. portland maine trail systemWeb14 de jan. de 2014 · Carroll (1992; 1993) observes that many of the differences can be attributed to the concavity of the consumption function under uncertainty, but he does not describe the conditions under which the consumption function will be concave. We show that if labor income is stochastic, ... optim8 downloadWeb10 de mar. de 1995 · On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints. Shin’ichi Nishiyama, R. Kato. Economics. 2012. This paper demonstrates the concavity of the consumption function of infinitely living households under liquidity constraints who are not prudent—i.e. with a quadratic utility. portland maine traffic reportWebof concavity.4 Concavity of the consumption function is interesting for several reasons. The most important is probably that strict concavity implies that consumption growth … optim.sgd weight_decayWebDownloadable! This paper demonstrates the concavity of the consumption function of infinitely living households under liquidity constraints who are not prudent - i.e. with a quadratic utility. The concavity of the consumption function is closely related to the 3-convexity of the value function. optim-r roofing systemWebConcavity of consumption function remains robust under habit formation. • In general, concavity of consumption function is preserved under a weaker condition. • Under … optim8 employee portalWebOn the Concavity of Consumption Function under Habit Formation⋆ Haoyu Liua,∗ aGuanghua School of Management, Peking University, 5 Yiheyuan Road, Haidian … portland maine train schedule