Kraft, Holger; Munk, Claus; Seifried, Frank Thomas; … - 2013
We show that the optimal consumption of an individual over the life cycle can have the hump shape (inverted U … consumption strategy in closed form, deduce sufficient conditions for the presence of a consumption hump, and characterize the age … at which the hump occurs. Numerical examples illustrate our findings. We show that our model calibrates well to U …