Average consumer decisions in an economy with heterogeneous subjective discount rates and risk aversion coefficients: the finite horizon case

This paper aims to study the behavior of the average rational consumer of an economy populated by heterogeneous agents in a finite horizon framework. Heterogeneity takes into account both the subjective discount rate and risk aversion coefficient. Closed-form solutions for the optimal paths of consumption and capital, of the average consumer, are derived. Moreover, a closed form solution for the economic welfare of the average consumer is obtained.

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Year of publication:	2014-04-23
Authors:	Palafox-Roca, Alfredo Omar ; Venegas-martínez, Francisco
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 34.2014, 2, p. 842-849
Publisher:	AccessEcon
Subject:	Heterogeneous preferences \| subjective discount rate \| risk aversion coefficient \| consumption decisions \| average consumer

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Extent:	application/pdf
Type of publication:	Article
Classification:	C6 - Mathematical Methods and Programming ; D9 - Intertemporal Choice and Growth
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010770411