Analytical Results for a Model of Periodic Consumption

Clare Kelly () and Gauthier Lanot
Additional contact information
Clare Kelly: University of Warwick, Department of Economics, Postal: Coventry, CV4 7AL, United Kingdom.

No KERP 2003/01, Keele Economics Research Papers from Centre for Economic Research, Keele University

Abstract: This paper presents the partial analytical solution to a model of periodic consumption that incorporates imperfect capital markets and uncertainty. Our model assumes that consumption decisions occur more frequently than income receipts. We show that the week-specific consumption functions can be ordered. At low levels of wealth these functions exhibit a ‘‘u-shaped’’ pattern between income receipts. We show analytically that changes in the level of the borrowing constraint affect only the level of consumption function and not the MPC, whilst mean-preserving changes in uncertainty affect both.

Keywords: Analytical consumption function, liquidity constraints; uncertainty. (search for similar items in EconPapers)
JEL-codes: D11 D12 D91 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2003-04
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.keele.ac.uk/depts/ec/wpapers/kerp0301.pdf (application/pdf)

Related works:
Working Paper: Analytical results for a Model of Periodic Consumption (2003)
Working Paper: ANALYTICAL RESULTS FOR A MODEL OF PERIODIC CONSUMPTION (2003)
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:kee:kerpuk:2003/01

Ordering information: This working paper can be ordered from
Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm

Access Statistics for this paper

More papers in Keele Economics Research Papers from Centre for Economic Research, Keele University Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom. Contact information at EDIRC.
Bibliographic data for series maintained by Martin E. Diedrich ( this e-mail address is bad, please contact ).