changes in risk to fluctuations in aggregate consumption and (d) the significant impact of incomplete markets on aggregate …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 …

. Although money is of itself neutral in these models, the presence of menu costs, expectations which are not unit elastic, or …

the potential mechanisms driving economic fluctuations as well as modify key policy implications. We first show how a …

precautionary saving motive in a two-period model with Kreps-Porteus preferences. For small risks, we derive a measure of the … strength of the precautionary saving motive, which generalizes the concept of ‘prudence’ introduced by Kimball (1990b). For … large risks, we show that decreasing absolute risk aversion guarantees that the precautionary saving motive is stronger than …

, agents’ prior beliefs are endogenously heterogeneous. Finally, in a consumption-saving problem with stochastic income, agents … problem, agents overestimate the return on their investment and exhibit a preference for skewness. In general equilibrium …

future policy reversal lowers the consumption rate of interest and thus will increase current consumption. Furthermore, to …

Consumption and Investment are significantly and negatively affected by all terror indicators, and the largest impact is …

This paper uses household surveys from 13 developing countries to describe consumption choices, health and education … daily consumption per capita is between $2 and $4 or between $6 and $10. The data shed lights on differences and … have fewer, healthier, and better educated children. While there are clear differences in consumption patterns between the …