One of the basic motives for saving is the accumulation of wealth to insure future welfare. Both introspection and extant research on consumption insurance find that people face substantial risks that they do not fairly pool. In theory, the consumption and wealth accumulation of price-taking...

This paper employs a synthetic cohort technique and Consumer Expenditure Survey data to construct average age-profiles of consumption and income over the working lives of typical households across different education and occupation groups. Using these profiles, we estimate a structural model of...

This paper estimates a structural model of optimal life-cycle consumption expenditures in the presence of realistic labor income uncertainty. We employ synthetic cohort techniques and Consumer Expenditure Survey data to construct average age-profiles of consumption and income over the working...

<DIV>The twenty-eighth edition of the <I>NBER Macroeconomics Annual </I>continues its tradition of featuring theoretical and empirical research on central issues in contemporary macroeconomics. As in previous years, this volume not only addresses recent developments in macroeconomics, but also takes up...</i></div>

<DIV>The twenty-ninth edition of the <I>NBER Macroeconomics Annual </I>continues its tradition of featuring theoretical and empirical research on central issues in contemporary macroeconomics. Two papers in this year’s issue deal with recent economic performance: one analyzes the evolution of aggregate...</i></div>

The twenty-seventh edition of the NBER Macroeconomics Annual continues a tradition of featuring theoretical and empirical contributions that shed light on central issues in contemporary macroeconomics, pushing the frontiers of macroeconomic research on topics related to both the business cycle...

This paper introduces a tractable, structural model of subjective beliefs. Since agents that plan for the future care about expected future utility flows, current felicity can be increased by believing that better outcomes are more likely. On the other hand, expectations that are biased towards...