Does government growth reduce precautionary saving?
The paper extends the constant-relative-risk-aversion model by endogenizing the Arrow-Pratt coefficient of relative risk aversion. The empirical application treats this coefficient as a linear function of the rate of growth of real government expenditure per worker and estimates a Euler equation for consumption using Greek annual aggregate data for the period 1960-1993. The results support the view that government growth may cause a typical consumer to become less risk averse and save less.
Document Type: Research Article
Publication date: 01 April 1997
- Editorial Board
- Information for Authors
- Subscribe to this Title
- Ingenta Connect is not responsible for the content or availability of external websites
- Access Key
- Free content
- Partial Free content
- New content
- Open access content
- Partial Open access content
- Subscribed content
- Partial Subscribed content
- Free trial content