(and possibly uncertain) income paths, hold a risk-free asset, and face a liquidity constraint. I first show that the … when income is constant. This additional capital accumulation has sometimes been interpreted as precautionary savings, but … I demonstrate that it is mostly generated by permanent-income motives. -- equilibrium interest rate ; aggregate savings …

application to the income-consumption relationship, using monthly US time series. Evidence is found to support the claim that the … series ; business cycles ; conditional distribution ; consumption-income relationship ; copula ; multivariate time …