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Utility functions, future consumption targets and subsistence thresholds

Author

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  • Brishti Guha

    (Singapore Management University)

  • Ashok Guha

    (Indian Statistical Institute, New Delhi)

Abstract

If the consumer's risk aversion behavior varies intertemporally and if the risk aversion coefficient on future consumption becomes very large, the consumer tends to aim at a fixed future consumption target. A by-product is a reinterpretation of subsistence theories of consumption.

Suggested Citation

  • Brishti Guha & Ashok Guha, 2008. "Utility functions, future consumption targets and subsistence thresholds," Economics Bulletin, AccessEcon, vol. 4(30), pages 1-4.
    • Handle: RePEc:ebl:ecbull:eb-08d90009
    as

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    References listed on IDEAS

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    1. Christopher D. Carroll, 2004. "Theoretical Foundations of Buffer Stock Saving," Economics Working Paper Archive 517, The Johns Hopkins University,Department of Economics.
    2. Guha Brishti & Guha Ashok S, 2008. "Target Saving in an Overlapping Generations Model," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-26, March.
    3. Steger, Thomas M., 2000. "Economic growth with subsistence consumption," Journal of Development Economics, Elsevier, vol. 62(2), pages 343-361, August.
    4. Samwick, Andrew A., 1998. "Tax Reform and Target Saving," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 621-635, September.
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    More about this item

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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