The Spirit of Capitalism, Precautionary Savings, and Consumption

Recent research has shown that the "spirit of capitalism"--a preference for wealth itself, in addition to consumption--has important implications for growth and asset pricing. This paper explores how the spirit of capitalism affects saving and consumption behavior. We demonstrate that the...

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Main Authors:	Luo, Yulei, Smith, William T., Zou, Heng-Fu
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Macroeconomics: Consumption Saving Wealth E210 Capitalist Systems: Political Economy P160
Online Access:	http://hdl.handle.net/10986/4733

id	okr-10986-4733
recordtype	oai_dc
spelling	okr-10986-47332021-04-23T14:02:19Z The Spirit of Capitalism, Precautionary Savings, and Consumption Luo, Yulei Smith, William T. Zou, Heng-Fu Macroeconomics: Consumption Saving Wealth E210 Capitalist Systems: Political Economy P160 Recent research has shown that the "spirit of capitalism"--a preference for wealth itself, in addition to consumption--has important implications for growth and asset pricing. This paper explores how the spirit of capitalism affects saving and consumption behavior. We demonstrate that the spirit of capitalism may reduce the importance of precautionary savings. It can also explain the excess sensitivity puzzle: the spirit of capitalism causes dramatic deviations from a random walk. It may also offer a partial explanation of the excess smoothness puzzle. 2012-03-30T07:29:28Z 2012-03-30T07:29:28Z 2009 Journal Article Journal of Money, Credit, and Banking 00222879 http://hdl.handle.net/10986/4733 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Macroeconomics: Consumption Saving Wealth E210 Capitalist Systems: Political Economy P160
spellingShingle	Macroeconomics: Consumption Saving Wealth E210 Capitalist Systems: Political Economy P160 Luo, Yulei Smith, William T. Zou, Heng-Fu The Spirit of Capitalism, Precautionary Savings, and Consumption
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Recent research has shown that the "spirit of capitalism"--a preference for wealth itself, in addition to consumption--has important implications for growth and asset pricing. This paper explores how the spirit of capitalism affects saving and consumption behavior. We demonstrate that the spirit of capitalism may reduce the importance of precautionary savings. It can also explain the excess sensitivity puzzle: the spirit of capitalism causes dramatic deviations from a random walk. It may also offer a partial explanation of the excess smoothness puzzle.
format	Journal Article
author	Luo, Yulei Smith, William T. Zou, Heng-Fu
author_facet	Luo, Yulei Smith, William T. Zou, Heng-Fu
author_sort	Luo, Yulei
title	The Spirit of Capitalism, Precautionary Savings, and Consumption
title_short	The Spirit of Capitalism, Precautionary Savings, and Consumption
title_full	The Spirit of Capitalism, Precautionary Savings, and Consumption
title_fullStr	The Spirit of Capitalism, Precautionary Savings, and Consumption
title_full_unstemmed	The Spirit of Capitalism, Precautionary Savings, and Consumption
title_sort	spirit of capitalism, precautionary savings, and consumption
publishDate	2012
url	http://hdl.handle.net/10986/4733
_version_	1764392550580355072

The Spirit of Capitalism, Precautionary Savings, and Consumption

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