axiomatic foundations for the structure of the utility function and study optimal consumption in a dynamic model. The model …

utility minus the utility when retiring now. This note shows that a utility function which depends only weakly on the value of … leisure such as the utility function proposed by Stock and Wise (1990) and used in many applications (see Gruber and Wise …, various issues) makes this difference flat relative to a more leisure-sensitive utility function. This explains the poor …

construct an alternative business-cycle model capturing these two features by adding two assumptions to a money-in-the-utility-function … model: the labor market is subject to matching frictions, and real wealth enters the utility function. These assumptions …