On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints
Shin-Ichi Nishiyama and
No 274, TERG Discussion Papers from Graduate School of Economics and Management, Tohoku University
This paper demonstrates the concavity of the consumption function of infinitely living households under liquidity constraints who are not prudent - i.e. with a quadratic utility. The concavity of the consumption function is closely related to the 3-convexity of the value function.
Pages: 10 pages
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Persistent link: https://EconPapers.repec.org/RePEc:toh:tergaa:274
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