An estimation of the life cycle/permanent income model with rational expectations that allows for uncertain future interest rates. Results provide ample evidence to reject this form of model during the postwar period.

This paper explores marriage’s role when markets are incomplete and individuals cannot diversify their idiosyncratic labor income risk. All else being equal, an individual would rather marry a “hedge” (a person whose income is negatively correlated with her own) because doing so raises her...

A calculation of the stochastic properties of consumption when income follows a fractional stochastic process, showing how this may explain excess-smoothness results noted in previous studies.

An analysis of the interest rate and savings effects of fiscal policy in an overlapping generations framework, discussing the circumstances under which capital's steady-state marginal product varies.

An analysis assessing the sensitivity of consumption to income using a life-cycle model of consumption that incorporates the possibility of bankruptcy.