Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5089271 | Journal of Banking & Finance | 2013 | 9 Pages |
Abstract
We propose an optimization criterion that yields extraordinary consumption smoothing compared to the well known results of the life-cycle model. Under this criterion we solve the related consumption and investment optimization problem faced by individuals with preferences for intertemporal stability in consumption. We find that the consumption and investment patterns demanded under the optimization criterion is in general offered as annuity benefits from products in the class of 'Formula Based Smoothed Investment-Linked Annuities'.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Kenneth Bruhn, Mogens Steffensen,