Fernández-Villaverde, Jesús; Krueger, Dirk - In: Macroeconomic Dynamics 15 (2011) 05, pp. 725-770
In this paper we investigate whether a standard life-cycle model in which households purchase nondurable consumption and consumer durables and face idiosyncratic income and mortality risk as well as endogenous borrowing constraints can account for two key patterns of consumption and asset...