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The volatility trap : precautionary saving, investment, and aggregate risk /
We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store-or-sow" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low investment, or a "volatility trap." Namely,...
| Clasificación: | Libro Electrónico |
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| Autores principales: | , |
| Formato: | Electrónico eBook |
| Idioma: | Inglés |
| Publicado: |
[Washington, D.C.] :
International Monetary Fund,
©2012.
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| Colección: | IMF working paper ;
WP/12/134. |
| Temas: | |
| Acceso en línea: | Texto completo |
| Sumario: | We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store-or-sow" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low investment, or a "volatility trap." Namely, big savers invest relatively little. In contrast, low volatility of permanent shocks leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks. Empirical evidence shows a nonlinear relationship between investment and saving and that investment is a hump-shaped function of the volatility of permanent shocks, as predicted by the model |
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| Notas: | Title from PDF title page (IMF Web site, viewed June 1, 2012). "Institute for Capacity Development." "May 2012." |
| Descripción Física: | 1 online resource (21 pages) : illustrations |
| Bibliografía: | Includes bibliographical references. |
| ISBN: | 1475570694 9781475570694 1475503865 9781475503869 |