IDEAS home Printed from https://ideas.repec.org/a/bpj/bejmac/vcontributions.5y2005i1n6.html
   My bibliography  Save this article

The Buffer-Stock Consumption Model with Endogenous Income Shifts

Author

Listed:
  • Malchow-Møller Nikolaj

    (Centre for Economic and Business Research (CEBR) and University of Southern Denmark)

  • Thorsen Bo Jellesmark

    (Royal Veterinary and Agricultural University and Centre for Economic and Business Research (CEBR))

Abstract

Credit-constrained households must use savings both to smooth consumption and to finance productive investments. This non-separability between consumption and production decisions is ignored in the standard intertemporal buffer-stock consumption model where income growth is exogenous. This paper develops an intertemporal model of household consumption and investment in the presence of credit constraints and income uncertainty. Investment options are modelled as irreversible, indivisible, and non-stationary, allowing for endogenous income growth. The resulting behaviour is markedly different from that of the standard buffer-stock model.

Suggested Citation

  • Malchow-Møller Nikolaj & Thorsen Bo Jellesmark, 2005. "The Buffer-Stock Consumption Model with Endogenous Income Shifts," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-27, June.
    • Handle: RePEc:bpj:bejmac:v:contributions.5:y:2005:i:1:n:6
    DOI: 10.2202/1534-6005.1108
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1534-6005.1108
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1534-6005.1108?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Riyong Kim Bakkegaard & Martin Reinhardt Nielsen & Bo Jellesmark Thorsen, 2017. "Household determinants of bushmeat and eru (Gnetum africanum) harvesting for cash in the Democratic Republic of Congo," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(4), pages 1425-1443, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejmac:v:contributions.5:y:2005:i:1:n:6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.