This paper investigates the impact of habits on savings and steady state capital intensity. Within the framework of an OLG economy with productive capital, a rise in the strength of habits increases savings if the steady state is asymptotically stable. Consequently, the steady state capital...

This paper presents a model where the ability to enjoy consumption gets impaired by disabilities over time. A continuous-time Markov chain model is constructed to examine how disability risk affects consumers' discounting of future utilities. It is shown that hyperbolic discounting arises for...

We show that quasi-hyperbolic discounting not only affects savings decisions but also the demand for insurance. In general, insurance demand by quasi-hyperbolic discounters is time-inconsistent. Without liquidity constraints they buy more insurance than initially planned. In the presence of...

Using the Bank of Italy's Survey of Households Income and Wealth (SHIW) covering a 5-year panel, we measure the impact of the degree of households' financial literacy on the quota of housing investment in their portfolio. We find that households with higher levels of financial literacy hold a...

A sustainable standard of living at retirement is an issue of great importance for most retirees and is certainly a major consideration in the allocation of client portfolios for private wealth managers. This study uses past equity returns and a thirty year rolling average forecasting method to...

This paper investigates the impact of habits on savings and steady state capital intensity. Within the framework of an OLG economy with productive capital, a rise in the strength of habits increases savings if the steady state is asymptotically stable. Consequently, the steady state capital...

This paper describes the relation between fertility and intergenerational child-care support provided by grandparents in a model based on the overlapping generations model with endogenous fertility. Results show that intergenerational child-care support causes fertility to fluctuate. This paper...

Using dynamic programming methodology, the paper analyzes the most general conditions for an additive utility functional to represent time consistent preferences. It challenges the conventional wisdom of the domain, which, following Strotz(1956), assume that only exponential discounting is...

The Uzawa-Lucas model is believed to yield a positive dependence of the output growth on the ratio of human capital to physical capital (an empirically plausible imbalance effect). We show that the imbalance effect become less plausible for a low physical capital share and a low elasticity of...

Cummins et al. (2006) construct a new measure of fundamentals, and show that the positive cash flow effects typically found in investment-Q models disappear when traditional Q is replaced with their new measure. Their results are not robust to small changes in their specification or in the...