This paper addresses two questions. First, what are the key factors that affect a consumer's lifetime budget constraint and how do they evolve over the lifecycle? Second, how do consumers respond to changes in these factors? We examine the permanent income hypothesis and the Keynesian...

This paper tests the rational expectations lifecycle model of consumption against (1) a simple Keynesian model and (ii) the rational expectations lifecycle model with imperfect capital markets. The tests are based upon the relative responsiveness of consumption to income changes which can be...

This note develops the solutions of the static portfolio optimization problem in explicit matrix form. Three cases are contemplated and connected, with the derivation of relevant corner solutions: the unconstrained problem in the presence of risky assets only, the constrained one, and the...

In this paper we present and confront the main comparative static results - effects of labor supply, demand and institutional wage movements - of the (a) basic two-sector model in six different scenarios: free market; partial (one-sector) coverage with perfect intersector mobility; partial...

In this paper we present and confront the main comparative static results - effects of labor supply, demand and institutional wage movements - of the (a) basic two-sector model in six different scenarios: free market; partial (one-sector) coverage with perfect intersector mobility; partial...

This article digresses over the interaction of uncertainty with the firm's optimal decisions in a simple framework: a standard price-taking (short-run restricted) single-input and output unit, subject to the interaction with a zero-mean Bernoulli lottery. The firm is always considered an...

This research explores the integration of foreign workers in the Portuguese labor market. It develops two subjects: on the one hand, the position of foreign work in the general employment pattern. On the other, the impact of foreigners on the sector wage-skill schedule, i.e., on log earnings...