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Theoretical foundations of buffer stock saving

Carroll, Christopher D. - 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 wealth...

Persistent link: https://www.econbiz.de/10010293477

Liquidity constraints and precautionary saving

Carroll, Christopher D.; Kimball, Miles S. - 2001

Economists working with numerical solutions to the optimal consumption/saving problem under uncertainty have long known that there are quantitatively important interactions between liquidity constraints and precautionary saving behavior This paper provides the analytical basis for those...

Persistent link: https://www.econbiz.de/10010293505

Rushing into American dream? House prices, timing of homeownership, and adjustment of consumer credit

Agarwal, Sumit; Hu, Luojia; Huang, Xing - 2013

homeownership as a function of credit constraints and expectations of future house price. Our panel data allows us to track … quartile house price growth, the median individual become homeowners earlier by 5 years in their lifecycle compared to MSAs … with lowest quartile house price growth. The result suggests that the effect of expectation dominates the effect of credit …

Persistent link: https://www.econbiz.de/10010352190

Long-Run Saving Dynamics: Evidence from Unexpected Inheritances

Druedahl, Jeppe; Martinello, Alessandro - 2017

Long-run saving dynamics are a crucial component of consumption-saving behavior. This paper makes two contributions to the consumption literature. First, we exploit inheritance episodes to provide novel causal evidence on the long-run effects of a large financial windfall on saving behavior. For...

Persistent link: https://www.econbiz.de/10013208751

Exploring differences in financial literacy across countries: the role of individual characteristics and institutions

Cupak, Andrej; Fessler, Pirmin; Silgoner, Maria Antoinette - 2018

We examine recently compiled microdata from the OECD/INFE survey covering information on the financial literacy of adult individuals from twelve countries around the globe. We find large differences in financial literacy across countries and decompose them into those explainable by differences...

Persistent link: https://www.econbiz.de/10013370137

Peer effects and debt accumulation: Evidence from lottery winnings

Gulbrandsen, Magnus A. H. - 2021

I estimate the effect of lottery winnings on peers' debt accumulation using administrative data from Norway. I identify neighbors of lottery winners, and estimate an average debt response of 2.1 percent of the lottery prize among households that live up to ten houses from the winner. Analyzing...

Persistent link: https://www.econbiz.de/10013373821

Saving on a Rainy Day, Borrowing for a Rainy Day

Alan, Sule; Crossley, Thomas; Low, Hamish - 2012

The aim of this paper is to understand what a recession means for individual consumers, and to model in a life-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in the current and recent recessions. We show...

Persistent link: https://www.econbiz.de/10010500212

Who is at the top? Wealth mobility over the life cycle

Hochguertel, Stefan; Ohlsson, Henry - 2012

Who is wealthy? This paper presents empirical estimates of household movements into and out of the top percents of the wealth distribution over individual life cycles. There are life-cycle motives and precautionary motives for wealth accumulation. The opportunities to accumulate wealth create...

Persistent link: https://www.econbiz.de/10010321431

Optimal default policies in defined contribution pension plans when employees are biased

Ivanov, Asen - 2018

This paper analyses a model in which employees are biased in their perception of their optimal contribution rates or asset allocations in defined contribution pension plans. The optimal default is characterised as a function of the parameters. It is shown that, for some values of the parameters,...

Persistent link: https://www.econbiz.de/10012144202

Optimal pension plan default policies when employees are biased

Ivanov, Asen - 2019

What is the optimal default contribution rate or default asset allocation in pension plans? Could active decision (i.e., not setting a default and forcing employees to make a decision) be optimal? These questions are studied in a model in which each employee is biased regarding her optimal...

Persistent link: https://www.econbiz.de/10012144238

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