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Georges-Kot, Simon; Goux, Dominique; Maurin, Eric - 2022

This paper explores the extent to which workers are willing to trade hours worked for leisure time shared with their … spouse. This parameter is essential to properly assess contemporary trends in the regulation of work and leisure time. We use … but we show that a large fraction of them substitute a day of unpaid leisure for a day of paid work whenever their spouse …

Persistent link: https://www.econbiz.de/10013172887

Consumption paths under prospect utility in an optimal growth model

Foellmi, Reto; Rosenblatt-Wisch, Rina; Schenk-Hoppé, … - 2010

This paper studies the Cass-Koopmans-Ramsey model of optimal economic growth in the presence of loss aversion and habit formation. The representative agent's preferences for consumption can be gradually varied between the standard constant intertemporal elasticity of substitution (CIES) case and...

Persistent link: https://www.econbiz.de/10008797768

Making the case for a low intertemporal elasticity of substitution

Braun, R. Anton; Nakajima, Tomoyuki - 2012

We provide two ways to reconcile small values of the intertemporal elasticity of substitution (IES) that range between 0.35 and 0.5 with empirical evidence that the IES is large. We do this reconciliation using a model in which all agents have identical preferences and the same access to asset...

Persistent link: https://www.econbiz.de/10009424703

Consumption paths under prospect utility in an optimal growth model

Foellmi, Reto; Rosenblatt-Wisch, Rina; Schenk-Hoppé, … - 2010

capital. -- Ramsey growth model ; prospect theory ; loss aversion ; optimal consumption …

Persistent link: https://www.econbiz.de/10008760472

Determinants of Precautionary Savings : Elasticity of Intertemporal Substitution vs. Risk Aversion

Oduncu, Arif - 2013

The purpose of this paper is to understand the effects of the elasticity of intertemporal substitution (EIS) and risk aversion on savings separately and determine which coefficient is more important factor for precautionary savings. This is an important question since a significant fraction of...

Persistent link: https://www.econbiz.de/10013087070

Labor Income Share Dynamics with Variable Elasticity of Substitution

Paul, Saumik - 2019

The accumulation principle suggests that complementarity between capital and labor forces the labor income share to rise in the presence of capital accumulation. The CES model estimates using data from 20 Japanese industries between 1970 and 2012 explain the same outcome but with substitutable...

Persistent link: https://www.econbiz.de/10012867988

A Decline in Labor's Share with Capital Accumulation and Complementary Factor Inputs : An Application of the Morishima Elasticity of Substitution

Paul, Saumik - 2019

The role of capital accumulation as a driver of the labor income share requires capital and labor to be substitutes, which appears paradoxical in a world predominantly characterized by complementarity between capital and labor. This paper argues that the composition of skills in the labor force...

Persistent link: https://www.econbiz.de/10012870261

Subjective Intertemporal Substitution

Crump, Richard K. - 2020

We estimate the elasticity of intertemporal substitution (EIS)—the response of expected consumption growth to changes in the real interest rate—using subjective expectations data from the New York Fed's Survey of Consumer Expectations (SCE). This unique data set allows us to estimate the...

Persistent link: https://www.econbiz.de/10012856136

A Skeptical Note on the Role of Constant Elasticity of Substitution in Labor Income Share Dynamics

Paul, Saumik - 2019

The constancy of the elasticity of factor substitution (σ) makes its role as a driver of the labor income share exogenous. The constant elasticity of substitution (CES) production function has predominantly been used to support this causal relationship. We argue that (i) capital-labor ratio...

Persistent link: https://www.econbiz.de/10012861135

Revisiting intertemporal elasticity of substitution in a sticky price model

Kilponen, Juha; Vilmunen, Jouko; Vähämaa, Oskari - 2021

Macroeconomic models typically assume additively separable preferences where consumption enters the utility function in a logarithmic form. This restriction implies that consumption growth is highly sensitive to movements in real interest rates, which in turn implies an unrealistically steep...

Persistent link: https://www.econbiz.de/10012544373