Arbeitspapier

Making the case for a low intertemporal elasticity of substitution

We provide two ways to reconcile small values of the intertemporal elasticity of substitution (IES) that range between 0.35 and 0.5 with empirical evidence that the IES is large. We do this reconciliation using a model in which all agents have identical preferences and the same access to asset markets. We also conduct an encompassing test, which indicates that specifications of the model with small values of the IES are more plausible than specifications with a large IES.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 2012-1

Klassifikation
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Business Fluctuations; Cycles
One, Two, and Multisector Growth Models
Thema
uncertainty
intertemporal elasticity of substitution
risk aversion
business cycles
growth

Ereignis
Geistige Schöpfung
(wer)
Braun, R. Anton
Nakajima, Tomoyuki
Ereignis
Veröffentlichung
(wer)
Federal Reserve Bank of Atlanta
(wo)
Atlanta, GA
(wann)
2012

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Braun, R. Anton
  • Nakajima, Tomoyuki
  • Federal Reserve Bank of Atlanta

Entstanden

  • 2012

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