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Precautionary Saving and the Marginal Propensity to Consume out of Permanent Income

Carroll, Christopher - National Bureau of Economic Research (NBER) - 2001

The budget constraint requires that, eventually, consumption must adjust fully to any permanent shock to income. Intuition suggests that, knowing this, optimizing agents will fully adjust their spending immediately upon experiencing a permanent shock. However, this paper shows that if consumers...

Persistent link: https://www.econbiz.de/10005078625

Denial of Death and Economic Behavior

Kopczuk, Wojciech; Slemrod, Joel - National Bureau of Economic Research (NBER) - 2005

We model denial of death and its effect on economic behavior. Attempts to reduce death anxiety and the possibility of denial of mortality-relevant information interact with intertemporal choices and may lead to time-inconsistent behavior and other "behavioral" phenomena. In the model, repression...

Persistent link: https://www.econbiz.de/10005087485

Exotic Preferences for Macroeconomists

Backus, David; Routledge, Bryan R.; Zin, Stanley E. - National Bureau of Economic Research (NBER) - 2004

We provide a user's guide to exotic' preferences: nonlinear time aggregators, departures from expected utility …, preferences over time with known and unknown probabilities, risk-sensitive and robust control, hyperbolic' discounting, and … preferences over sets ( temptations'). We apply each to a number of classic problems in macroeconomics and finance, including …

Persistent link: https://www.econbiz.de/10005088791

Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey

Kimball, Miles Spencer; Shapiro, Matthew D.; Barsky, … - National Bureau of Economic Research (NBER) - 1995

Individuals' preferences underlying most economic behavior are likely to display substantial heterogeneity. This paper …

Persistent link: https://www.econbiz.de/10005714478

Heterogeneity and Risk Sharing in Village Economies

Townsend, Robert M.; Chiappori, Pierre-André; … - National Bureau of Economic Research (NBER) - 2011

-markets consumption allocation. There is substantial heterogeneity in risk preferences estimated from the full-insurance model, positively …

Persistent link: https://www.econbiz.de/10008788772

Theoretical Foundations of Buffer Stock Saving

Carroll, Christopher - National Bureau of Economic Research (NBER) - 2004

"Buffer-stock" versions of the dynamic stochastic optimizing model of saving are now standard in the consumption literature. This paper builds theoretical foundations for rigorous understanding of the main characteristics of buffer stock models, including the existence of a target level of...

Persistent link: https://www.econbiz.de/10005248846

Revising Commitments: Field Evidence on the Adjustment of Prior Choices

Silverman, Dan; Giné, Xavier; Goldberg, Jessica; Yang, Dean - National Bureau of Economic Research (NBER) - 2012

revisions of money allocations toward the present are associated with spousal preferences for such revision, household shocks or …

Persistent link: https://www.econbiz.de/10011271412

Does Home Owning Smooth the Variability of Future Housing Consumption?

Sinai, Todd; Paciorek, Andrew - National Bureau of Economic Research (NBER) - 2010

We show that the hedging benefit of owning a home reduces the variability of housing consumption after a move. When a current home owner's house price covaries positively with housing costs in a future city, changes in the future cost of housing are offset by commensurate changes in wealth...

Persistent link: https://www.econbiz.de/10008727860

The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives

Ameriks, John; Caplin, Andrew; Van Nieuwerburgh, Stijn; … - National Bureau of Economic Research (NBER) - 2007

Strong bequest motives can explain low retirement spending, but so equally can strong precautionary motives. Given this identification problem, the recent tradition has been largely to ignore bequest motives. We develop a rich model of spending in retirement that allows for both motives, and...

Persistent link: https://www.econbiz.de/10005774383

Mortality Risk, Inflation Risk, and Annuity Products

Brown, Jeffrey Robert; Mitchell, Olivia; Poterba, James - National Bureau of Economic Research (NBER) - 2000

As growing numbers of retirees reach retirement age with substantial balances in self-directed retirement plans, annuities are likely to become increasingly important instruments for drawing down retirement savings. This study explores recent trends in the pricing of single-premium annuity...

Persistent link: https://www.econbiz.de/10005774446