Money in the Utility Function (Classic Reprint): An Empirical Implementation: An Empirical Implementation (Classic Reprint) - Softcover

Inhaltsangabe

Explore how households derive value from money and liquid assets, not just from consumption. This study presents a unified way to model asset demands that treats liquidity as a direct source of utility, alongside consumption.

The authors build a representative consumer model that includes four major asset classes—money, time deposits, short-term government debt, and corporate equity—and examine how these holdings interact with consumption. They estimate a utility-based framework using instrumental variables and test whether liquidity services are a real part of utility, not just a byproduct of other theories. The work also discusses estimation challenges, model identifiability, and how the results stack up against previous studies.

• How the theory connects consumption, asset holdings, and liquidity services in a single framework


• Estimation methods, overidentifying restrictions, and what the data say about utility from liquidity


• Key findings on the share of spending devoted to consumption and the elasticity of substitution among assets


• Implications for interpreting asset demand and for comparing with earlier models

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