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We present a model where the saving rate of the household sector, especially households at the bottom of the income distribution, becomes the endogenous variable that adjusts in order for full employment to be maintained over time. An increase in income inequality and the current account deficit...
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by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium …
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The standard neoclassical growth model with Cobb-Douglas production predicts a monotonically declining saving rate, when reasonably calibrated. Ample empirical evidence, however, shows that the transition paths of most countries' saving rates exhibit a statistically significant hump-shaped...
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Savings behaviour seems to exhibit heterogeneity across nations, and within nations, too. Large changes in saving rates … tradition in the savings literature that separates people into two groups: those who behave soberly (ants), and those who act in … persist? Our aim is to provide a model that exhibits the arbitrariness of savings by exploring the two-types idea, and also …
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by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium …
Persistent link: https://www.econbiz.de/10010490685