ABSTRACT This paper demonstrates the concavity of the consumption function of infinitely living households under liquidity constraints who are not prudent—i.e. with a quadratic utility. The concavity of the consumption function is closely related to the 3-convexity of the value function.
Cite this paper
S. Nishiyama and R. Kato, "On the Concavity of the Consumption Function with a Quadratic Utility under Liquidity Constraints," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 566-569. doi: 10.4236/tel.2012.25104.
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