An approximate consumption function

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2010
Volume: 34
Issue: 3
Pages: 404-416

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper proposes an approximation to the consumption function. The approximation is based on the analytic properties of the consumption function in the buffer-stock model. In such model, the consumption function is increasing and concave and its derivative is bounded from above and below. We compare the approximation with the consumption function obtained using the endogenous grid-points algorithm and show that using the former or the latter for estimating the Euler equation leads to very similar results.

Technical Details

RePEc Handle
repec:eee:dyncon:v:34:y:2010:i:3:p:404-416
Journal Field
Macro
Author Count
1
Added to Database
2026-01-28