stochastic optimization problem However under realistic descriptions of utility and uncertainty the optimal consumption/saving …The standard approach to modelling consumption/saving problems is to assume that the decisionmaker is solving a dynamic …

This paper studies the consumption decisions of agents who face costs of acquiring, absorbing and processing … consumption plans. In between updating dates, they remain inattentive. This behaviour implies that news disperses slowly … throughout the population, so events have a gradual and delayed effect on aggregate consumption. The model predicts that …

We show that the hedging benefit of owning a home reduces the variability of housing consumption after a move. When a … consumption by about 11%. Households at the top end of the covariance distribution who are likely to have owned large homes before …

two-period consumption and savings model for a loss-averse agent who measures utilityfrom consumption relative to a … of the return on saving. We find non-linearity in the fractionof wealth saved, where the specific saving pattern depends … on the sign of the real return on savings. The amount of saving is nondecreasing in initial wealth and the riskiness of …

stochastic pollution tax, which is uncorrelated with the technological uncertainty of pollution, is compared with a pure … uncertainty associated with pollution leads to an increase in abatement activities and therefore supports the corresponding …

This paper presents a theory of the productivity slowdown based on the effects that uncertainty has on the productivity … of specialized capital. Uncertainty reduces the efficiency of inflexible capital and generates a slowdown. It also … technologies as the cause of the slowdown. The model also highlights the positive effect that uncertainty has on the speed of …

activity on optimal consumption and investment. Here, learning introduces two sources of risk about future payoffs: structural … uncertainty and uncertainty from the anticipation of learning. The latter renders control and learning nonseparable. We present … decreases optimal consumption are provided. The effect depends on the strengths and directions of the two sources of risk, which …