Optimal Expenditure Policy Under Varying Levels Of Capital Allocations And Costs

Life - cycle expenditure allocations and the consumption costs of children *

In this paper we assess whether it is changing needs or intertemporal substitution that dominate household expenditure responses to the presence of children over the life-cycle. We construct lifetime expenditure paths for households with different demographic proliles and consider the shape of these paths and some possible implications for welfare measures. Simulated expenditure paths based on ...

Human Capital and Optimal Policy under Risk and Credit Constraints

Optimal tax policy under habit formation and capital utilization

Our objective is to investigate, how the combination of habit formation with endogenous capital utilization decisions affects the process of economic growth. We find that in the presence of positive productivity growth, habit formation in consumption reduces the rate of capital utilization while increasing the long run stock of capital. We show in the Chamley–Judd result of zero income capital ...

Bank Capital, Agency Costs, and Monetary Policy

Evidence suggests that banks, like firms, face financial frictions when raising funds. The authors develop a quantitative, monetary business cycle model in which agency problems affect both the relationship between banks and firms and the relationship between banks and their depositors. As a result, bank capital and entrepreneurial net worth jointly determine aggregate investment, and are impor...

Weighted risk capital allocations

By extending the notion of weighted premium calculation principles, we introduce weighted risk capital allocations, explore their properties, and develop computational methods. When achieving these goals, we find it particularly fruitful to relate the weighted allocations to general Stein-type covariance decompositions, which are of interest on their own. © 2008 Elsevier B.V. All rights reserved.