This is a short survey on consumption theory. Consumption is important to both fluctuation and growth. In addition, consumption introduces some important issues involving financial markets and portfolio decisions. We will describe consumption decisions in a dynamic context. Uncertainty about...

In this paper, a stochastic endogenous aggregative growth model is constructed and two main results are established, based on endogenous horizon of the economy and endogenous terminal capital stock, which is also efficient capital accumulation in some sense. First, strong turnpike theorems under...

This paper derives the general equilibrium effects of rational inattention (or RI; Sims 2003, 2010) in a model of incomplete income insurance (Huggett 1993, Wang 2003). We show that, under the assumption of CARA utility with Gaussian shocks, the Permanent Income Hypothesis (PIH) arises in...

In this paper, we examine the joint consumption-portfolio decision of an agent with limited information-processing capacity (rational inattention or RI) in the sense of Sims (2003) within a non-linear-quadratic (non-LQ) setting. Our model predicts that, as processing capacity falls, agents...

We examine the optimal consumption decisions of households in a micro-founded framework that assumes two financial frictions: heterogeneity between borrowing and saving households, and endogenous default. We study default in the context of two-period overlapping processes of consumer behavior,...

A general equilibrium model has been constructed in a stochastic endogenous growth economy driven by an Ito-Levy diffusion process. The minimum time to “economic maturity” for an underdeveloped economy has been computed both in the preference manifold of the modified Ramsey fashion and in...

A general equilibrium model has been constructed in a stochastic endogenous growth economy driven by an Ito-Levy diffusion process. The minimum time to “economic maturity” for an underdeveloped economy has been computed both in the preference manifold of the modified Ramsey fashion and in...

In this paper, we apply the idea of $k$-local contraction of \cite{zec, zet} to study discounted stochastic dynamic programming models with unbounded returns. Our main results concern the existence of a unique solution to the Bellman equation and are applied to the theory of stochastic optimal...

This article describes some dynamic aspects on dynastic utility incorporating two-sided altruism with an OLG setting. We analyzed the special case where the weights of two-sided altruism are dynamically inconsistent. The Bellman equation for two-sided altruism proves to be reduced to one-sided...

A general equilibrium model has been constructed in a stochastic endogenous growth economy driven by an Ito-Levy diffusion process. The minimum time to “economic maturity” for an underdeveloped economy has been computed both in the preference manifold of the modified Ramsey fashion and in...