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Housing Habits and Their Implications for Life-Cycle Consumption and Investment
We solve a rich life-cycle model of household decisions involving consumption of perishable goods and housing services, habit formation for housing consumption, stochastic labor income, stochastic house prices, home renting ...
The Impact of Biases in Survival Beliefs on Savings Behavior
"On average young people ""undersave"" whereas old people ""oversave"" with respect to the rational expectations model of life-cycle consumption and savings. According to numerous studies on subjective survival beliefs, ...
How Persistent Low Expected Returns Alter Optimal Life Cycle Saving, Investment, and Retirement Behavior
This Chapter explores how an environment of persistent low returns influences saving, investing, and retirement behaviors, as compared to what in the past had been thought of as more “normal” financial conditions. Our ...