Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
967322 | Journal of Monetary Economics | 2007 | 16 Pages |
Abstract
A puzzle in consumption theory is the observation of a hump in age-consumption profiles. This paper studies a general equilibrium life-cycle economy with capital in which households include both consumption and leisure in their period utility function. A calibrated version of the model shows that a significant hump in life-cycle consumption is a feature of the equilibrium. Thus inclusion of leisure in household preferences may provide part of the explanation of observed life-cycle consumption humps.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
James Bullard, James Feigenbaum,