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Future Targets and Multiple Equilibria

Author

Listed:
  • Ashok S. Guha

    (SMU)

  • Brishti Guha

Abstract

Multiple Pareto-rankable equilibria may obtain in an overlapping generations model where consumers save to reach a fixed target. Existence and uniqueness conditions are discussed. The model displays excess consumption sensitivity to current income and perfect old-age insurance.

Suggested Citation

  • Ashok S. Guha & Brishti Guha, 2005. "Future Targets and Multiple Equilibria," Macroeconomics Working Papers 22423, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:macroe:22423
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    File URL: http://www.eaber.org/node/22423
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    References listed on IDEAS

    as
    1. Yaacov Lavi, 2003. "Do Changes In Current Income Help To Explain Changes In Consumption In Israel?," Israel Economic Review, Bank of Israel, vol. 1(2), pages 113-135.
    2. Manisha Chakrabarty & Anke Schmalenbach, 2002. "The Effect of Current Income on Aggregate Consumption," The Economic and Social Review, Economic and Social Studies, vol. 33(3), pages 297-317.
    3. B. Bhaskara Rao, 2005. "Testing Hall's permanent income hypothesis for a developing country: the case of Fiji," Applied Economics Letters, Taylor & Francis Journals, vol. 12(4), pages 245-248.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    multiple equilibria; saving; overlapping generations; excess sensitivity;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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