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Behavioral Macroeconomics Via Sparse Dynamic Programming
Gabaix, Xavier - 2016
more, generating realistic dynamics. In the consumption-savings model, the consumer decides to pay little or no attention …
Persistent link: https://www.econbiz.de/10012456824
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Boundedly Rational Dynamic Programming : Some Preliminary Results
Gabaix, Xavier - 2012
A key open question in economics is the practical, portable modeling of bounded rationality. In this short note, I report ongoing progress that is more fully developed elsewhere. I present some results from a new model in which the decision-maker builds a simplified representation of the world....
Persistent link: https://www.econbiz.de/10012460875
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Dynamic Optimization Meets Budgeting : Unraveling Financial Complexities
Fenig, Guidon; Petersen, Luba - National Bureau of Economic Research - 2024
This paper explores sources of complexity in dynamic optimization, examining how individuals navigate variation in incomes, prices, and returns in ten-period consumption-saving decisions. Our findings reveal that dynamic optimization poses significant challenges, resulting in suboptimal choices...
Persistent link: https://www.econbiz.de/10015056146
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Numerical Solution of Dynamic Portfolio Optimization with Transaction Costs
Cai, Yongyang - 2013
We apply numerical dynamic programming to multi-asset dynamic portfolio optimization problems with proportional transaction costs. Examples include problems with one safe asset plus two to six risky stocks, and seven to 360 trading periods in a finite horizon problem. These examples show that it...
Persistent link: https://www.econbiz.de/10012459952
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Comparison Utility in a Growth Model
Carroll, Christopher D. - 1997
This paper compares the dynamics of two general equilibrium models of endogenous growth in which agents have comparison utility.' In the inward-looking' economy, individuals care about how their consumption in the current period compares to their own consumption in the past (one way to describe...
Persistent link: https://www.econbiz.de/10012472675
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Accounting for Macro-Finance Trends : Market Power, Intangibles, and Risk Premia
Farhi, Emmanuel - 2018
traditional culprits of increasing savings supply and technological growth slowdown …
Persistent link: https://www.econbiz.de/10012480933
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Saving and Growth : A Reinterpretation
Carroll, Christopher D. - 1993
We examine the relationship between income growth and saving using both cross-country and household data. At the aggregate level, we find that growth Granger causes saving, but that saving does not Granger cause growth. Using household data, we find that households with predictably higher income...
Persistent link: https://www.econbiz.de/10012474476
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When Does Domestic Saving Matter for Economic Growth?
Aghion, Philippe - 2006
innovation project, so local saving does not matter for growth. In our empirical exploration we show that lagged savings is … rather than through capital accumulation. Further, we show that savings is significantly associated with higher levels of FDI …
Persistent link: https://www.econbiz.de/10012466393
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Simplifying Choices in Defined Contribution Retirement Plan Design
Keim, Donald B. - 2016
rates and expense ratios, and we estimate this could lead to aggregate savings for these participants over a 20-year period …
Persistent link: https://www.econbiz.de/10012456818
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The Choice Channel of Financial Innovation
Iachan, Felipe S. - 2015
effect of these developments on investors' savings and asset returns. In our model, investors with possibly heterogeneous … beliefs choose their savings portfolios. Under mild assumptions, we establish a choice channel by which greater portfolio … early 1980s, and is in contrast with the "precautionary savings" literature that would make the opposite prediction. Greater …
Persistent link: https://www.econbiz.de/10012456983