How should changes in environmental quality occurring in the future be discounted? To answer this question we consider a model of “ecological discounting,” where the representative consumer has a utility function defined over two attributes, consumption and environmental quality, which...

This paper develops a theoretical model that identifies the relationship between the volatility of private sector wages and growth. The model suggests two distinct channels in which wage volatility affects growth: a positive direct way and a negative indirect way. The direct effect stems from...

We analyze precautionary saving behavior in a framework with labor and non-labor income risks, an endogenous supply of labor, and a representation of preferences that disentangles attitudes towards risk, attitudes towards intertemporal smoothing, and ordinal preferences for consumption and...

We establish general conditions under which younger investors should invest a larger proportion of their wealth in risky assets than older ones. In the finite horizon dynamic setting, we show that such phenomenon, known as time diversification, can occur in the presence of human wealth, target...

Recent research has shown that the "spirit of capitalism"--a preference for wealth itself, in addition to consumption--has important implications for growth and asset pricing. This paper explores how the spirit of capitalism affects saving and consumption behavior. We demonstrate that the spirit...

In this paper we analyze customer-class price discrimination in the face of uncertain demands. More precisely, we explore the pricing decision of a multiproduct monopoly facing random, correlated demands. We consider only a uniform price for each customer class; multi-part pricing is not...