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In this paper we attempt to (i) extend the competitive equilibrium neoclassical growth model to incorporate consumer preferences that are of the Gul-Pesendorfer variety; (ii) use the model to analyze taxation and welfare; and (iii) extend and specialize the Gul-Pesendorfer temptation formulation...
Persistent link: https://www.econbiz.de/10005073599
Persistent link: https://www.econbiz.de/10005073642
We analuze a general-equilibrium asset pricing model where a small subset of the consumers/investors have a short-run "urge to save." That is, their attitudetoward consumption in the long run is a standard one--they do place zero weight on consumption far enough out in the future--but their...
Persistent link: https://www.econbiz.de/10005073645
How do individuals with time-inconsistent preferences make consumption-savings decisions? We try to answer this question by considering the simplest possible form of consumption-savings problem, assuming that discountingg is quasi-geometric. A solution to the decision problem is then a...
Persistent link: https://www.econbiz.de/10005027521
Persistent link: https://www.econbiz.de/10005027528
We consider a representative-agent equilibrium model where the consumer has quasi-geometric discounting and cannot commit to future actions. With restricted attention to a parametric class for preferences and technology--logarithmic utility, Cobb-Douglas production, and full depreciaiton--we...
Persistent link: https://www.econbiz.de/10005027545
Calibrated versions of existing representative-agent models have in common that the welfare costs of business cycles are extremely small. We investigate the welfare effects of eliminating business cycles in a model with substantial consumer heterogeneity. The heterogeneity is due to uninsurable...
Persistent link: https://www.econbiz.de/10005029133