borrowing constraints and risk-averse households. In this estimation, we account for measurement error in both consumption and income and we use an auxiliary model---which forms the bridge between the data and the consumption-savings model---that provides a sharp distinction between the RIP and...

We explore the properties of Pareto optimal allocations when agents have heterogeneous recursive preferences. The dynamics of individual consumption growth reflect not just standard mean-variance tradeoffs as in the expected-utility model, but also tradeoffs involving the timing of the...