The Life-Cycle Model of Consumption and Saving

Journal of Economic Perspectives - Tập 15 Số 3 - Trang 3-22 - 2001
Martin Browning1, Thomas F. Crossley2
1Institute of Economics, University of Copenhagen, Copenhagen, Denmark; Institute for Fiscal Studies, London, United Kingdom.
2York University, Toronto, Canada; Centre for Economic Policy Research, Australian National University, Canberra, Australia.

Tóm tắt

A central implication of life-cycle models is that agents smooth consumption. We review the empirical evidence on smoothing at frequencies from within the year up to across a lifetime. We find that life-cycle models--particular those which incorporate realistic features of markets and goods--have more empirical successes than failures. We also show that some apparent deviations from theoretical predictions imply very small welfare losses for agents. Finally, we emphasize that the coherence of life-cycle models imposes an important discipline when incorporating new features into models.

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Thông tin
Thông tin xuất bản

Journal of Economic Perspectives

Tập 15 Số 3

3-22

Thông tin tác giả