The effect of interest rates on consumption in an income fluctuation problem
(2018)
Journal Article
Lehrer, E., & Light, B. (2018). The effect of interest rates on consumption in an income fluctuation problem. Journal of Economic Dynamics and Control, 94, 63-71. https://doi.org/10.1016/j.jedc.2018.07.004
We examine the effect of a change in interest rates on an agent’s consumption and savings decisions when her income is fluctuating. In each period, a long-lived agent decides how much to save (i.e., invest in a risky bond) and how much to consume whi... Read More about The effect of interest rates on consumption in an income fluctuation problem.