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during good times and increase spending during bad times -- a cyclical matching rate on contributions to retirement savings … accounts. The combination of matching rates and matching limits on retirement savings plans creates sharp kinks in … bad aggregate states? I model an economy with liquid and illiquid savings accounts in which matching is suspended during …
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This paper analyses the conduct of monetary policy in an environment in which cyclical swings in risk appetite affect households' propensity to save. It uses a New Keynesian model featuring external habit formation to show that taking note of precautionary saving motives justifies an...
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