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We reexamine the empirical relevance of habit formation preferences with micro-data on households' portfolio choices. We first derive the analytical solution to the risky asset share in a theoretical model with both habits and time-varying labor income. Our analytical results indicate that (1)...
Persistent link: https://www.econbiz.de/10015231310
We analyze whether relative risk aversion varies with wealth. We first derive theoretical predictions on how risky … Dynamics. Contrary to the existing literature, our empirical results show evidence of relative risk aversion varying with …
Persistent link: https://www.econbiz.de/10015234208
negatively affects homeownership, and this effect is long-lasting. The risk of a divorce triggers a precautionary savings motive … partially substitute for precautionary savings. When young, the larger asset accumulation due to divorce-risk induced …We build a realistically calibrated life-cycle model of housing decisions under divorce risk. As observed in the data …
Persistent link: https://www.econbiz.de/10015262095
include if (i) she becomes more risk averse, (ii) investment opportunities shrink, (iii) investment returns become riskier, or … continuation utility, which produces the same qualitative changes in savings rates as lowering the interest rate. …
Persistent link: https://www.econbiz.de/10015256001
This paper investigates the impact of the desire to keep up with the Joneses (KUJ) on economic growth and optimal tax policy in a continuous time overlapping generations model with AK technology and gradual retirement. Due to the desire to KUJ, the propensity to consume out of total wealth rises...
Persistent link: https://www.econbiz.de/10015218696
-induced uncertainty makes non-cooperative and risk-averse households behave more myopically, resulting in a Nash equilibrium of a Pareto …
Persistent link: https://www.econbiz.de/10015219254
-induced uncertainty makes non-cooperative and risk-averse households behave more myopically, resulting in a Nash equilibrium of a Pareto …
Persistent link: https://www.econbiz.de/10015219279
several decades, yet it is very much in contradiction to prevailing macroeconomic theory. This paper finds that a standard …
Persistent link: https://www.econbiz.de/10015220599
This thesis is built upon two core arguments. The first is the notion that the demographic transition should be narrated through the perspective of ageing rather than population growth and the second is that ageing on a macroeconomic level represents a strong driver of international capital...
Persistent link: https://www.econbiz.de/10015221131
(positive) impact on households’ consumption (savings), even after we control for family income. We argue that people save to … inequality can strengthen the incentives of status-seeking savings by increasing the benefit of improving status and enlarging …
Persistent link: https://www.econbiz.de/10015221527