Neoclassical Life-Cycle Consumption: A Textbook Example
Journal
Economic Theory
ISSN
0938-2259
ISSN-Digital
1432-0479
Type
journal article
Date Issued
2001-01-01
Author(s)
Abstract
We present a simple neoclassical life-cycle model in continuous time, in which the effects of endogenous labor supply, uncertain lifetime, and family composition on consumption and income profiles are jointly analyzed. Due to a parsimonious specification, analytical solutions for consumption growth are available for constant intertemporal elasticity of substitution preferences. Without relying on borrowing constraints, the model can generate a hump in the consumption profile, and a comovement of consumption and income during working life.
Language
English
Keywords
Life-cycle consumption profiles
Consumption-income correlation
HSG Classification
not classified
Refereed
Yes
Publisher
Springer
Publisher place
Berlin
Volume
17
Number
1
Start page
209
End page
221
Pages
13
Subject(s)
Eprints ID
10178