Elliot Aurissergues

Internal seminars

Elliot Aurissergues

Time preferences and aggregate consumption puzzles

IBD Salle 16

Îlot Bernard du Bois - Salle 16

5-9 boulevard Maurice Bourdet
13001 Marseille

Thursday, April 25 2019| 12:30pm to 1:45pm

Mathieu Faure: mathieu.faure[at]univ-amu.fr
Gaëtan Fournier: gaetan.fournier[at]univ-amu.fr


In standard Real Business cycles or New Keynesian Models, aggregate consumption dynamics is given by the euler equation of a representative agent. This modelling assumption have long been controversial and at odds with various empirical evidence. Recent macroeconomic (the "forward guidance puzzle") and microeconomic (the existence of "wealthy hand to mouth" households) pieces of evidence have strengthened these doubts. The goal of this paper is to investigate whether alternative time preferences may help to explain those facts. I explore implications in two models. The first one is a representative agent new keynesian model with more general intertemporal preferences. The second one is a perpetual youth model with an "exotic" intertemporal utility function. This last model may provide an explanation for the existence of wealthy hand to mouth households.