Skip to main content
Article thumbnail
Location of Repository

Analytical results for a model of periodic consumption

By Clare Kelly and Gauthier Lanot


This paper presents the partial analytical solution to a model of periodic consumption that incorporates imperfect capital markets and uncertainty. Our model assumes that consumption decisions occur more frequently than income receipt. We show that the week specific consumption functions can be ordered. At low levels of wealth these functions exhibit a “ushaped”pattern between income receipts. We show analytically that changes in the level of the borrowing constraint affect only the level of consumption function and not the MPC whilst mean preserving changes in uncertainty affect both

Topics: HB
Publisher: University of Warwick, Department of Economics
Year: 2003
OAI identifier:

Suggested articles


  1. (1996). A Theory of Commodity Price Fluctuations. doi
  2. (2001). A Theory of the Consumption Function, with and without Liquidity Constraints. doi
  3. (1996). Competitive Storage and Commodity Price Dynamics. doi
  4. (2002). Consumption smoothing over Pay Periods. University of Warwick Working Paper 656. 39
  5. (1995). Estimating a Non-Linear Rational Expectations Commodity Price Model with Unobservable State Variables. doi
  6. (1996). On the Concavity of the Consumption Function. doi
  7. (1989). Optimal Consumption with Stochastic Income Deviations from Certainty Equivalence. doi
  8. (1991). Saving and Liquidity Constraints. doi
  9. (1992). The Analytics of Uncertainty and Information, doi
  10. (2002). When do borrowing constraints bind? Some new results on the income fluctuation problem. doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.