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A Tractable Model of Precautionary Reserves, Net Foreign Assets, or Sovereign Wealth Funds
Carroll, Christopher D. - 2009
We model the motives for residents of a country to hold foreign assets, including the precautionary motive that has been omitted from much previous literature as intractable. Our model captures many of the principal insights from the existing specialized literature on the precautionary motive,...
Persistent link: https://www.econbiz.de/10012463421
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A Tractable Model of Buffer Stock Saving
Carroll, Christopher D. - 2009
We present a tractable model of the effects of nonfinancial risk on intertemporal choice. Our purpose is to provide a simple framework that can be adopted in fields like representative-agent macroeconomics, corporate finance, or political economy, where most modelers have chosen not to...
Persistent link: https://www.econbiz.de/10012463386
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Precautionary Savings and the Importance of Business Owners
Hurst, Erik - 2005
business owners and non-business owners, the size of precautionary savings with respect to labor income risk is modest and … high estimate of the importance of precautionary savings. New data from the Survey of Consumer Finances further confirms … that precautionary savings account for less than ten percent of total wealth for both business owners and non …
Persistent link: https://www.econbiz.de/10012466941
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Cash Holdings and Credit Risk
Acharya, Viral V. - 2011
, suggesting that precautionary savings are central to understanding the effects of cash on credit risk …
Persistent link: https://www.econbiz.de/10012461663
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Theoretical Foundations of Buffer Stock Saving
Carroll, Christopher - 2004
"Buffer-stock" versions of the dynamic stochastic optimizing model of saving are now standard in the consumption literature. This paper builds theoretical foundations for rigorous understanding of the main characteristics of buffer stock models, including the existence of a target level of...
Persistent link: https://www.econbiz.de/10012467822
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On Transactions and Precautionary Demand For Money
Frenkel, Jacob A. - 1978
This paper develops a stochastic framework for the analysis of transactions and precautionary demand for money. The analysis is based on the principles of inventory managements and the key feature of the model is its stochastic characteristics which lead to the need for precautionary reserves....
Persistent link: https://www.econbiz.de/10012478862
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Financial Innovation and the Transactions Demand for Cash
Alvarez, Fernando E. - 2007
We document cash management patterns for households that are at odds with the predictions of deterministic inventory models that abstract from precautionary motives. We extend the Baumol-Tobin cash inventory model to a dynamic environment that allows for the possibility of withdrawing cash at...
Persistent link: https://www.econbiz.de/10012465235
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Optimal Exploration and Price Paths of a Non-renewable Commodity with Stochastic Discoveries
Ekeland, Ivar; Schlenker, Wolfram; Tankov, Peter; … - National Bureau of Economic Research - 2022
We address the long-standing challenge of adding optimal exploration to the classic Hotelling model of a non-renewable resource. We completely solve such a model, using impulse control. The model, extending Arrow and Chang (1982), has two state variables: "proven" reserves and a finite...
Persistent link: https://www.econbiz.de/10013191029
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The Taxation of Exhaustible Resources
Dasgupta, Partha - 1980
This paper analyzes the effect of taxation on the intertemporal allocation of an exhaustible resource. A general framework within which a large variety of taxes can be analyzed is developed and then applied to a number of specific taxes. It is shown that there exists a pattern of taxation which...
Persistent link: https://www.econbiz.de/10012478709
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Bubbles in Prices of Exhaustible Resources
Jovanovic, Boyan - 2007
Aside from the equilibrium that Hotelling (1931) displayed, his model of non-renewable resources also contains a continuum of bubble equilibria. In all the equilibria the price of the resource rises at the rate of interest. In a bubble equilibrium, however, the consumption of the resource peters...
Persistent link: https://www.econbiz.de/10012465330