This paper studies the consumption decisions of agents who face costs of acquiring, absorbing and processing … consumption plans. In between updating dates, they remain inattentive. This behaviour implies that news disperses slowly … throughout the population, so events have a gradual and delayed effect on aggregate consumption. The model predicts that …

We show that the hedging benefit of owning a home reduces the variability of housing consumption after a move. When a … consumption by about 11%. Households at the top end of the covariance distribution who are likely to have owned large homes before …

stochastic pollution tax, which is uncorrelated with the technological uncertainty of pollution, is compared with a pure … uncertainty associated with pollution leads to an increase in abatement activities and therefore supports the corresponding …

activity on optimal consumption and investment. Here, learning introduces two sources of risk about future payoffs: structural … uncertainty and uncertainty from the anticipation of learning. The latter renders control and learning nonseparable. We present … decreases optimal consumption are provided. The effect depends on the strengths and directions of the two sources of risk, which …

environmental preferences and uncertainty on optimal financing is ambiguous. …

In this paper we analyze a model of consumption and investment when preferences are loss averse around a habit level … explicitly models aversion to below-habit consumption. Existing approaches either neglect the possibility of below …-habit consumption or model habit formation by dividing consumption through a habit. Confronting the traditional model using ratios with …