Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 17, 2017 erstellt
Beschreibung:
There exists one potential source which has not obtained full treatment in the recent consumption literature: a negative wealth constraint (NWC). An economic agent who faces the NWC can borrow up to a certain proportion of the present value of labor income. We present an analytically tractable consumption-savings and investment model with the NWC. The model can prove one important result: consumption is strictly concave with wealth (Carroll and Kimball, 1996) even when labor income is perfectly riskless. More interestingly, the higher marginal propensity to consume out of financial wealth obtains with the tighter NWC