Feigenbaum, James; Caliendo, Frank N.; Gahramanov, Emin - Deakin University, Faculty of Business and Law, School … - 2009
Contrary to the usual presumption that welfare is maximized if consumers behave rationally, we show in a two-period overlapping generations model that there always exists a rule of thumb that can weakly improve upon the lifecycle/permanent-income rule in general equilibrium with irrational...
