On the stability of the constant relative risk aversion (CRRA) utility under high degrees of uncertainty |
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| Authors: | Trino-Manuel Ñ í guez,Ivan Paya |
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| Affiliation: | a Department of Economics and Quantitative Methods, Westminster Business School, University of Westminster, London NW1 5LS, UKb Department of Economics, Lancaster University Management School, Lancaster LA1 4YX, UKc Department of Economics, University of Salamanca, 37007 Salamanca, Spain |
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| Abstract: | Growth models under uncertainty and constant relative risk aversion (CRRA) utility are fragile in explaining consumers’ choice, as equilibrium consumption is dependent on distributional assumptions. We show that, under semi-nonparametric distributions, general equilibrium models are stable, as the existence of expected utility is guaranteed. |
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| Keywords: | D80 |
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