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a). The paper proves the results on consumption growth, provides an existence proof for optimal consumption and a …
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parsimonious and quite tractable way. I illustrate the approach via a boundedly rational version of the consumption-saving life …
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parsimonious and quite tractable way. I illustrate the approach via a boundedly rational version of the consumption-saving life …
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with liquidity w = W/Y . Additionally, financial frictions cause consumption to decrease with this endogenously determined … consumption and the dispersion of w. Permanent earnings shocks, especially large discrete stochastic jumps, make consumption …
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