We show that (Marshallian) income elasticities are proportional to (Frisch) own price elasticities if all goods are additively separable. This implies that luxuries are likely to be easier to postpone. It also implies that preferences over "consumption" are unlikely to display a constant...

The life-cycle framework is the standard way that economists think about the intertemporal allocation of time, effort and money. The framework has a venerable history in the economics profession with roots in the in…nite horizon models of Ramsey (1926) and Friedman (1957) and the …nite...