Koehne, Sebastian; Kuhn, Moritz - CESifo - 2014
formation can be analyzed using dynamic programming techniques. Second, we derive optimal labor and savings wedges for habit … to labor supply and savings. We demonstrate that the theoretical results are quantitatively important: in a stylized life …-cycle model, average labor and savings wedges fall by more than one third compared to time-separable references. Third, we exploit …