How should changes in environmental quality occurring in the future be discounted? To answer this question we consider a model of “ecological discounting,” where the representative consumer has a utility function defined over two attributes, consumption and environmental quality, which...

We analyze precautionary saving behavior in a framework with labor and non-labor income risks, an endogenous supply of labor, and a representation of preferences that disentangles attitudes towards risk, attitudes towards intertemporal smoothing, and ordinal preferences for consumption and...

Pooled forecasts frequently outperform individual forecasts of economic time series. This paper shows that the introduction of model uncertainty into the formation of expectations can account for the regularity. We conjecture that agents learn in a Bayesian way, using an optimally designed...

We analyze how commodity price variability affects saving behavior in a dynamic model with multiple commodities, portfolio hedging, and a preference structure that disentangles attitudes towards risk and attitudes towards intertemporal substitution. We show that the effect of price variability...

We analyze the demand for medical care and precautionary saving in a framework with uncertainty surrounding the incidence of illness and the effectiveness of medical treatments and a representation of preferences that disentangles ordinal preferences, risk preferences, and intertemporal...