Precautionary saving over the business cycle

• Autores: Edouard Challe, Xavier Ragot
• Localización: Economic journal, ISSN 0013-0133, Vol. 126, Nº 590, 2016, págs. 135-164
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • We study the macroeconomic implications of time-varying precautionary savings within a general equilibrium model with borrowing constraints, aggregate shocks and uninsurable idiosyncratic unemployment risk. Our framework generates limited cross-sectional household heterogeneity as an equilibrium outcome, thereby making it possible to analyse the role of precautionary saving over the business cycle in an analytically tractable way. The time-series behaviour of aggregate consumption generated by our model is closer to the data than that implied by the hand-to-mouth and representative-agent models, and it is comparable to that produced by the Krusell and Smith