Precautionary Saving Over the Business Cycle

Edouard Challe and Xavier Ragot

SciencePo Working papers Main from HAL

Abstract: We study the macroeconomic implications of time-varying precautionary savings within a general equilibrium model with borrowing constraints, aggregate shocks and uninsurable idiosyncratic unemployment risk. Our framework generates limited cross-sectional household heterogeneity as an equilibrium outcome, thereby making it possible to analyse the role of precautionary saving over the business cycle in an analytically tractable way. The time-series behaviour of aggregate consumption generated by our model is closer to the data than that implied by the hand-to-mouth and representative-agent models, and it is comparable to that produced by the Krusell and Smith (1998) model.

Keywords: Business Cycle; Business cycle shocks; Households; Precautionary saving (search for similar items in EconPapers)
Date: 2016-02
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01313771v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in The Economic Journal, 2016, 126 (590), pp.135 - 164. ⟨10.1111/ecoj.12189⟩

Downloads: (external link)
https://shs.hal.science/halshs-01313771v1/document (application/pdf)

Related works:
Journal Article: Precautionary Saving Over the Business Cycle (2016)
Working Paper: Precautionary Saving Over the Business Cycle (2016)
Working Paper: Precautionary Saving Over the Business Cycle (2016)
Working Paper: Precautionary Saving over the Business Cycle (2013)
Working Paper: Precautionary Saving over the Business Cycle (2013)
Working Paper: Precautionary Saving over the Business Cycle (2013)
Working Paper: Precautionary Saving over the Business Cycle (2011)
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:hal:spmain:halshs-01313771

DOI: 10.1111/ecoj.12189

Access Statistics for this paper

More papers in SciencePo Working papers Main from HAL
Bibliographic data for series maintained by Contact - Sciences Po Departement of Economics ().