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Saver types: an evolutionary-adaptive approach

Varga, Gergely and Vincze, János (2019) Saver types: an evolutionary-adaptive approach. Society and Economy, 41 (2). pp. 263-287. DOI https://doi.org/10.1556/204.2019.41.2.6

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Official URL: https://doi.org/10.1556/204.2019.41.2.6


Abstract

We set up an agent-based macro-model that focuses on the consumption-saving decision. Agents do not maximize utility, but their behaviour features certain “rational” aspects of human choice based on the idea of ecological rationality. Three qualitatively different saving strategies are defi ned: 1, buffer stock saving (prudent and forward looking); 2, permanent income saving (forward looking without prudence); and 3, myopic saving (caring only about immediate consumption). It is found that prudent saving behaviour becomes prevalent when the selection pressure is very high, but an economy comprising only prudent households tends to accumulate capital in excess of what is implied by the Golden Rule. Lowering the intensity of evolutionary forces results in more diversity in saver types, and, somewhat puzzlingly, may be socially benefi cial in some sense.

Item Type:Article
Uncontrolled Keywords:agent-based macro-model, bounded rationality, evolutionary learning, saving types
JEL classification:C69 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling: Other
E21 - Macroeconomics: Consumption; Saving; Wealth
Subjects:Economic development
Finance
Projects:OTKA K 108658
DOI:https://doi.org/10.1556/204.2019.41.2.6
ID Code:4201
Deposited By: Veronika Vitéz
Deposited On:09 Aug 2019 12:36
Last Modified:09 Aug 2019 12:36

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