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Online Appendix to Efficient Timing of Retirement

Post-retirement, the model in the main text (published in the Review of Economic Dynamics) reduces to the Merton (1969) problem, which has of course an exact solution. Pre-retirement, however, the agent holds an American option, namely, retire now or keep working. Problems involving American options are generally difficult to solve exactly. This appendix describes an approximate solution to the agent's pre-retirement problem.
Year of publication:
2001-04
Authors: Kingston, Geoffrey H.
Institutions: Society for Economic Dynamics - SED
Subject: retirement | life cycle model | optimal stopping problem
Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Language: English
Notes:
The original article was published in the Review of Economic Dynamics, volume (2000), pages 831-840 8 pages
Classification: E21 - Consumption; Saving ; G11 - Portfolio Choice ; J26 - Retirement; Retirement Policies
Source:
Persistent link: https://www.econbiz.de/10004977902
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