Flynn, Joel P.; Schmidt, Lawrence; Akira Toda, Alexis - In: Theoretical economics : TE ; an open access journal in … 18 (2023) 1, pp. 231-265
We study a general class of consumption-savings problems with recursive preferences. We characterize the sign of the consumption response to arbitrary shocks in terms of the product of two sufficient statistics: the elasticity of intertemporal substitution (EIS) between contemporaneous...