Optimal consumption and savings with stochastic income and recursive utility
نویسندگان
چکیده
منابع مشابه
Optimal consumption and savings with stochastic income and recursive utility
We develop a tractable incomplete-markets model with an earnings process Y subject to permanent shocks and borrowing constraints. Financial frictions cause the marginal (certainty equivalent) value of wealth W to be greater than unity and decrease with liquidity w = W/Y . Additionally, financial frictions cause consumption to decrease with this endogenously determined marginal value of liquidit...
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2016
ISSN: 0022-0531
DOI: 10.1016/j.jet.2016.04.002