Exposita Notes: Neoclassical Life-Cycle Consumption: A Textbook Example

Posted: 23 Sep 2001

See all articles by Monika Butler

Monika Butler

University of St. Gallen; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

We present a simple neoclassical life-cycle model in continuous time, in which the effects of endogenous labor supply, uncertain lifetime, and family composition on consumption and income profiles are jointly analyzed. Due to a parsimonious specification, analytical solutions for consumption growth are available for constant intertemporal elasticity of substitution preferences. Without relying on borrowing constraints, the model can generate a hump in the consumption profile, and a comovement of consumption and income during working life.

Keywords and Phrases: Life-cycle consumption profiles, Consumption-income correlation

JEL Classification: D91

Suggested Citation

Bütler, Monika, Exposita Notes: Neoclassical Life-Cycle Consumption: A Textbook Example. Available at SSRN: https://ssrn.com/abstract=250658

Monika Bütler (Contact Author)

University of St. Gallen ( email )

Varnbuelstr. 14
Saint Gallen, St. Gallen CH-9000
Switzerland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
445
PlumX Metrics