Alcune considerazioni sul ruolo della ricchezza nella funzione aggregata del consumo - Analysis of the rate of wealth in the consumption function

Angela Testi ()
Additional contact information
Angela Testi: Università degli Studi di Genova, Dipartimento di Economia e Metodi Quantitativi, Darsena, Postal: Via Vivaldi 5 - 16126 Genova - Italy, http://www.unige.it/

Economia Internazionale / International Economics, 1985, vol. 38, issue 1, 91-120

Abstract: Analysis of the rate of wealth in the consumption function The purpose of this paper is twofold. First it discusses the role of wealth in the consumption function. Wealth can be demanded either because it yields a future income, as « permanent income » and « life cycle » theories assume, or because it provides a guarantee against unpredictable events, as « precautionary » theories state. In the first case, wealth is just a constraint on long run consumption maximization, in the latter it enters the individual utility function. Secondly this paper suggests that during inflation, after correcting income to take into account the loss of value, in real terms, of the financial assets, the « precautionary » theories are probably the most convincing to explain current consumption, because uncertainty emphasizes the demand for wealth chiefly as a precaution. Empirical investigation in Italy for 1970-1982 tentatively shows that financial assets had an important role in influencing aggregate household consumption. This conclusion must he taken with caution, because my empirical results are consistent with the others forms of the consumption function.

Date: 1985
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0569

Access Statistics for this article

Economia Internazionale / International Economics is currently edited by Giovanni Battista Pittaluga

More articles in Economia Internazionale / International Economics from Camera di Commercio Industria Artigianato Agricoltura di Genova Via Garibaldi 4, 16124 Genova, Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Angela Procopio ().