Dynamic general equilibrium models are required to evaluate policies applied at the
national level. To use these models to make quantitative forecasts requires knowledge of an …

Consumption is the largest component of GDP. Since the 1950s, the life cycle and the
permanent income models have constituted the main analytical tools to the study of …

Economics has much to do with incentives--not least, incentives to work hard, to produce
quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this …

We present a qualitative and quantitative analysis of the standard growth model modified to
include precautionary saving motives and liquidity constraints. We address the impact on the …

The full insurance model is tested using data from three poor, high risk villages in the semi-
arid tropics of southern India. The model presented here incorporates a number of salient …

The substantially revised fourth edition of a widely used text, offering both an introduction to
recursive methods and advanced material, mixing tools and sample applications. Recursive …

This paper describes a new continuous-time principal-agent model, in which the output is a
diffusion process with drift determined by the agent's unobserved effort. The risk-averse …

This paper provides a critical survey of the large literature on the life cycle model of
consumption, both from an empirical and a theoretical point of view. It discusses several …

Consumption data generally indicates that consumption risk is not perfectly diversified
across individuals. This paper considers if and when imperfect diversification is a feature of …

We derive the optimal dynamic contract in a continuous‐time principal‐agent setting, and
implement it with a capital structure (credit line, long‐term debt, and equity) over which the …