We study portfolio choice for a finite-horizon investor whose labor income is cointegrated with inflation. We show that this long-run relationship has substantial impact on the riskiness of human capital and consequently on the optimal portfolio strategy. Because cointegration raises the...

The effects of the HIV/AIDS epidemic on fertility in Africa remains ill understood. To align the contrasting findings of recent empirical research, we develop a portfolio model that captures the potential trade-off between "quantity" and "quality" of offspring. According to this theoretical...