Utility functions, future consumption targets and subsistence thresholds

Author: 
Ashok Guha, Brishti Guha
JEL codes: 
Description: 
Paper No. 13-2008
Organisation: 
SMU
Abstract: 

If the consumers risk aversion behavior varies intertemporally and if the risk aversion coefficient on future consumption becomes very large, the consumer tends to aim at a fixed
future consumption target. A by-product is a reinterpretation of subsistence theories of consumption.