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Identifier to cite or link to this item: https://hdl.handle.net/10086/23252

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Title
Quantifying Borrowing Constraints and Precautionary Savings
Creator
Creator Name
Nirei, Makoto Nirei, Makoto
楡井, 誠 楡井, 誠
Affiliation
Affiliation Name
Hitotsubashi University
Rights
Copyright (c) 2006 Elsevier Inc. All rights reserved.
Key Word
Liquidity constraint
Precautionarysavings
Borrowingconstraint
Natural debt limit
Excess consumption growth
Uninsured endowment shock
JEL
E21
C68
Abstract
This paper quantifies the effects of precautionary savings. It demonstrates that Zeldes' estimate [12] of excess consumption growth for low asset holders is consistent with a dynamic general equilibrium model with uninsurable endowment shocks when borrowing is constrained at three months’ worth of average wage income. I propose a Monte Carlo simulation of the stationary equilibrium as a method of indirectly testing the hypotheses of a no-borrowing specification and a natural debt limit specification. At the estimated borrowing constraint, an increase in endowment shocks within the range of empirical findings can cause a 1.6% increase in the savings rate and a 6.9% increase in capital.
Publisher
Elsevier B.V.
Issued Date
2006-04
Language
English(eng)
Resource Type
journal article
Version Type
AM
Is Version OfRelation -
Related Identifier
DOI
  10.1016/j.red.2006.01.002
ISSN
1094-2025
NCID
AA1123800X
Source Title
Review of Economic Dynamics
Volume Number
9
Issue Number
2
Page Start
353
Page End
363
Appears in Collections
010a Journal Articles　=　雑誌掲載論文
URL
https://hdl.handle.net/10086/23252