Advertisement

Models of Subsistence Consumption

  • Robin Maialeh
Chapter
  • 10 Downloads
Part of the Contributions to Economics book series (CE)

Abstract

As was showed in the fourth chapter, the fundamental aspect of agents’ behaviour relates to self-preservation. Despite there are various options how to comprehend self-preservation in economics, we can generally understand it as expending a certain amount of resources in order to reproduce to the next period. This idea closely relates to a range of economic literature that is dedicated to subsistence consumption. The difference between using the term ‘reproduction’ instead of ‘subsistence’ is here rather semantical and it is not meant to be crucial for our further analysis. Nevertheless, in our sketchy understanding, reproduction more directly links to the dynamic processes, while subsistence has rather static connotations. This is potentiated by the fact that for most relevant articles it is common to consider subsistence consumption as constant. Nevertheless, we will use these terms throughout this book interchangeably with a preference to use the term ‘subsistence consumption’, following the practice of the field of study where this book is written.

References

  1. Achury C, Hubar S, Koulovatianos C (2012) Saving rates and portfolio choice with subsistence consumption. Rev Econ Dyn 15(1):108–126CrossRefGoogle Scholar
  2. Azariadis C (1996) The economics of poverty traps, Part One: Complete markets. J Econ Growth 1:449–486CrossRefGoogle Scholar
  3. Barro RJ, Sala-i-Martín Y (1995) Economic growth. McGraw-Hill, New YorkGoogle Scholar
  4. Christiano L (1989) Understanding Japan’s saving rate: the reconstruction hypothesis. Federal Reserve Minneapolis Quart Rev Spring:10–15Google Scholar
  5. Deaton A (1991) Saving and liquidity constraints. Econometrica 59:1221–1248CrossRefGoogle Scholar
  6. Deaton A (1992) Understanding consumption. Oxford University Press, OxfordCrossRefGoogle Scholar
  7. Dercon S (1998) Wealth, risk and activity choice: cattle in Western Tanzania. J Dev Econ 55:1–42CrossRefGoogle Scholar
  8. Dynan KE, Skinner J, Zeldes S (2004) Do the rich save more? J Polit Econ 112:397–444CrossRefGoogle Scholar
  9. Easterly W (1994) Economic stagnation, fixed factors, and policy thresholds. J Monet Econ 33:525–557CrossRefGoogle Scholar
  10. Gandolfo G (2010) Economic dynamics. SpringerGoogle Scholar
  11. Geary RC (1950) A note on “A constant-utility index of the cost of living”. Rev Econ Stud 18(2):65–66CrossRefGoogle Scholar
  12. Horkheimer M (2012[1949–67]) Critique of instrumental reason. Verso, LondonGoogle Scholar
  13. Jones R (1985) Report. Japan Economic InstituteGoogle Scholar
  14. King RG, Rebelo S (1993) Transitional dynamics and economic growth in the neoclassical model. Am Econ Rev 83:908–931Google Scholar
  15. Loayza N, Schmidt-Hebbel K, Serven L (2000) What drives private saving across the world? Rev Econ Stat 82:165–181CrossRefGoogle Scholar
  16. Malloy CJ, Moskowitz TJ, Vissing-Jorgensen A (2009) Long-run stockholder consumption risk and asset returns. J Financ 64:2427–2480CrossRefGoogle Scholar
  17. Merton RC (1969) Lifetime portfolio selection under uncertainty: the continuous-time case. Rev Econ Stat 51:247–257CrossRefGoogle Scholar
  18. Merton RC (1971) Optimum consumption and portfolio rules in a continuous-time model. J Econ Theory 3:373–413CrossRefGoogle Scholar
  19. Nelson R (1956) A Theory of the low-level equilibrium trap in underdeveloped economies. Am Econ Rev 46(5):894–908Google Scholar
  20. Ogaki M, Ostry JD, Reinhart CM (1996) Saving behaviour in low- and middle-income developing countries: a comparison. IMF Staff Pap 43(1):38–71CrossRefGoogle Scholar
  21. Rebelo S (1991) Long-run policy analysis and long run growth. J Polit Econ 99:500–521CrossRefGoogle Scholar
  22. Rebelo S (1992) Growth in open economies. Carn-Roch Conf Ser Public Policy 36:5–46CrossRefGoogle Scholar
  23. Rosenzweig MR, Binswanger HP (1993) Wealth, weather risk and the composition and profitability of agricultural investments. Econ J 103:56–78CrossRefGoogle Scholar
  24. Rosenzweig MR, Wolpin KI (1993) Credit market constraints, consumption smoothing, and the accumulation of durable production assets in low-income countries: investment in bullocks in India. J Polit Econ 101:223–244CrossRefGoogle Scholar
  25. Sarel M (1994) On the dynamics of economic growth. IMF Working Paper 138Google Scholar
  26. Sharif M (1986) The concept and measurement of subsistence: a survey of the literature. World Dev 14:555–577CrossRefGoogle Scholar
  27. Shin YH, Koo JL, Roh KH (2018) An optimal consumption and investment problem with quadratic utility and subsistence consumption constraints: a dynamic programming approach. Math Model Anal 23(4):627–638CrossRefGoogle Scholar
  28. Steger T (2000) Economic growth with subsistence consumption. J Dev Econ 63:343–361CrossRefGoogle Scholar
  29. Stone R (1954) Linear expenditure systems and demand analysis: an application to the pattern of British demand. Econ J 64(255):511–527CrossRefGoogle Scholar
  30. Strulik H (2010) A note on economic growth with subsistence consumption. Macroecon Dyn 14(5):763–771CrossRefGoogle Scholar
  31. Wachter JA, Yogo M (2010) Why do household portfolio shares rise in wealth? Rev Financ Stud 23:3929–3965CrossRefGoogle Scholar
  32. Zimmerman FJ, Carter M (2003) Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints. J Dev Econ 71(2):233–260CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Robin Maialeh
    • 1
    • 2
  1. 1.Department of Economics, Faculty of EconomicsUniversity of EconomicsPragueCzech Republic
  2. 2.Unicorn Research CentrePragueCzech Republic

Personalised recommendations