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On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints

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DOI: 10.4236/tel.2012.25104    4,859 Downloads   6,753 Views   Citations

ABSTRACT

This paper demonstrates the concavity of the consumption function of infinitely living households under liquidity constraints who are not prudent—i.e. with a quadratic utility. The concavity of the consumption function is closely related to the 3-convexity of the value function.


Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

S. Nishiyama and R. Kato, "On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 566-569. doi: 10.4236/tel.2012.25104.

References

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