In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that … incorporates household consumption and family labor supply decisions. We derive analytical expressions based on approximations for … the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non …

Recent theoretical contributions have suggested consumption externalities, or peergroup effects, as a potential … intertemporal consumption choice is a completely open question. To shed some light on the issue, we derive an extension of the … standard life-cycle model that allows for consumption externalities. The analysis is complicated by the challenge of …

In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that … incorporates household consumption and family labour supply decisions. We derive analytical expressions based on approximations for … the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non …