A BUFFER STOCK MODEL OF THE DEMAND FOR MONEY BY THE PERSONAL SECTOR

1994 ◽  
Vol 46 (4) ◽  
pp. 315-330 ◽  
Author(s):  
Paul Mizen
Keyword(s):  
Buffer Stock ◽  
Demand For Money ◽  
Stock Model

scholarly journals Persistent vs. Permanent Income Shocks in the Buffer-Stock Model

2016 ◽  
Vol 17 (1) ◽  
Author(s):  
Jeppe Druedahl ◽  
Thomas H. Jørgensen
Keyword(s):  
Permanent Income ◽  
Buffer Stock ◽  
Income Shocks ◽  
Stock Model

AbstractWe investigate the effects of assuming a

scholarly journals Determination of Optimal level of Foreign Reserves in Nigeria

2020 ◽  
pp. 65-85
Author(s):  
Ishola W. Oyeniran ◽  
Solomon A. Alamu
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Price Volatility ◽  
Optimal Level ◽  
Buffer Stock ◽  
Adjustment Cost ◽  
Foreign Reserves ◽  
Distributed Lag ◽  
Oil Price Volatility ◽  
Stock Model

This study adopts the ’buffer stock model’ advanced by Frenkel and Jovanovic (1981) to estimate the optimal level of foreign reserves for Nigeria. The Autoregressive Distributed Lag Approach (ARDL) was used to estimate the optimal foreign reserves function. The results show that the Nigeria’s optimal reserves level responses to adjustment cost of holding reserves and exchange rate volatility and that import and opportunity cost of reserves holding have insignificant impact on Nigeria’s optimal foreign reserves. The short run and long run estimates of the buffer stock model support the theory that foreign reserves holding in Nigeria is more sensitive to the precautionary than mercantilist motives of holding reserves. Thus, it is recommended that the Central Bank of Nigeria (CBN) should implement effective foreign reserves policies that consider exchange rate volatility, oil price volatility and global macroeconomic imbalances.

The Buffer Stock Model

2017 ◽  
Author(s):  
Tullio Jappelli ◽  
Luigi Pistaferri
Keyword(s):  
Marginal Utility ◽  
Credit Constraints ◽  
Liquidity Constraints ◽  
Borrowing Constraints ◽  
Precautionary Saving ◽  
Buffer Stock ◽  
Borrowing Constraint ◽  
Stock Model ◽  
Intertemporal Decisions ◽  
Period Model

We analyze models that combine precautionary saving and liquidity constraints to provide a unified, more realistic treatment of intertemporal decisions. We start off with a simple three-period model to illustrate how the expectation of future borrowing constraints can induce precautionary saving even in scenarios in which marginal utility is linear. A more general model that allows liquidity constraints and precautionary saving to interact fully is the buffer stock model, of which there are two versions. One, developed by Deaton (1991), emphasizes the possibility that a prudent and impatient consumer may face credit constraints. The other, by Carroll (1997), features the same type of consumer but allows for the possibility of income falling to zero and so generating a natural borrowing constraint.

The Self-Constrained Hand-to-Mouth

2021 ◽  
pp. 1-45
Author(s):  
Michael Gelman
Keyword(s):  
High Frequency ◽  
Liquidity Constraints ◽  
Exponential Model ◽  
Personal Finance ◽  
Buffer Stock ◽  
The Self ◽  
Proximate Cause ◽  
Ultimate Cause ◽  
Stock Model ◽  
Excess Sensitivity

Abstract Many studies have shown that consumption responds to the arrival of predictable income (excess sensitivity). This paper uses a buffer stock model of consumption to understand what causes excess sensitivity and to test which parametrization is consistent with empirical excess sensitivity estimates. Using high frequency granular data from a personal finance app, it finds that while liquidity constraints are a proximate cause, preferences are the ultimate cause of excess sensitivity. Furthermore, it finds that for feasible parameters, a quasi hyperbolic version of the model is more consistent with the level of excess sensitivity relative to a standard exponential model.

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