Luxury consumption, precautionary savings and wealth inequality
Abstract: Most macroeconomic models are based on the assumption of a single homogeneous consumption good. In the present paper we consider a model with two goods: a basic good and a luxury good. We then apply this assumption to a standard general equilibrium heterogeneous agent model. We find a substantial reduction in precautionary savings compared to a standard model. The effect on wealth inequality turns out to be ambiguous and to depend on the size of the assumed earnings risk.
- Location
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Deutsche Nationalbibliothek Frankfurt am Main
- Extent
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Online-Ressource
- Language
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Englisch
- Bibliographic citation
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Luxury consumption, precautionary savings and wealth inequality ; volume:18 ; number:1 ; year:2017 ; extent:15
The B.E. journal of macroeconomics ; 18, Heft 1 (2017) (gesamt 15)
- Creator
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Campanale, Claudio
- DOI
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10.1515/bejm-2015-0196
- URN
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urn:nbn:de:101:1-2409011648050.698974044674
- Rights
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Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
- Last update
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15.08.2025, 7:20 AM CEST
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Associated
- Campanale, Claudio
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