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-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in … times. We show that the rise in the aggregate savings ratio is driven by increases in uncertainty, rather than tightening of …
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On average, "young" people underestimate whereas "old" people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle...
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-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in … times. We show that the rise in the aggregate savings ratio is driven by increases in uncertainty, rather than tighening of … constraints ; savings ; recessions ; uncertainty …
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Using a unique data set with detailed information on Danish households and their mortgages, we show that young and old households are more likely to use IO mortgages compared to middle-aged households. Young households use IO mortgages to postpone repayment to a period with higher income, old...
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