We solve a rich life-cycle model of household decisions involving consumption of perishable goods and housing services …

risk. Economic theory suggests that when background risk rises, individuals will reduce their exposure to other risks. This … paper presents a test of this theory by examining the effect of medical expenditure risk on the willingness of elderly …

In this paper we study the role of household portfolio rebalancing channel for the aggregate and redistributive effects … subsequent wealth effect on consumption. In order to jointly study these effects, we introduce an heterogeneous household life … reduction in expected return on household portfolio. However, the strength of these two forces notably varies depending on …

risk. Economic theory suggests that when background risk rises, individuals will reduce their exposure to other risks. This … paper presents a test of this theory by examining the effect of medical expenditure risk on the willingness of elderly …