On average, “young”people underestimate whereas “old”people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle consumption and saving. Our analysis shows that agents with ambiguous survival beliefs (i) save less than origin...

This paper studies the time-series behavior of consumption in a model that incorporates birth, death, and a precautionary motive for saving. Consumption of an individual agent is a random walk. However, aggregate consumption is a random walk if and only if the s u m of the death rate and population growth rate is zero. Failure of the random walk hypothesis should not be attributed to finite hor...

We perform a structural estimation of the preference parameters in a buffer-stock consumption model augmented with temptation disutility. We adopt a two-stage Method of Simulated Moments methodology to match our simulated moments with those observed in the US Survey of Consumer Finances. To identify the parameters we use liquid and quasi-liquid (retirement) wealth holdings at different ages as ...

This article presents a novel computational approach to solving models with both uninsurable idiosyncratic and aggregate risk that uses projection methods, simulation and perturbation. The approach is shown to be both as efficient and as accurate as existing methods on a model based on Krusell and Smith (1998), for which prior solutions exist. The approach has the advantage of extending straigh...

China has experienced remarkably stable growth and inflation in recent years according to official statistics. We use systematic discrepancies between cross-sectional and time-series Engel curves to construct alternative estimates of Chinese growth and inflation. Our estimates suggest that official statistics present a smoothed version of reality. Official inflation rose in the 2000s, but our e...

401-0252-00 U Mathematik II: Analysis II und Lineare Algebra und Systemanalyse I Di 8-10 für Studiengang Agrarwissenschaft bzw. Lebensmittelwissenschaft. Do 9-11 oder Do 15-17 für Studiengang Erdwissenschaften. Do 13-15 für Studiengang Umweltnaturwissenschaften. 2 hrs Tue 08-10 CAB G52 HG E1.2 HG E22 HG E33.3 HG F26.3 Thu 09-11 HG E21 HG E22 13-15 HG D7.2 HG E22 HG F26.5 LFW E13 LFW E15 15-17 H...

We extend a standard overlapping-generations general-equilibrium model with idiosyncratic working ability shocks to design the optimal social security pension system. There are two main features in our approach. First, we keep track of individual social security wealth explicitly so that we can evaluate a wide range of policies, including “private accounts,” seamlessly. Second, we express our s...

Aging populations are leading countries worldwide to social security reforms. Many countries are moving from pay-as-you-go to personal retirement account (PRA) systems because of their financial sustainability and positive impact on private savings. PRA systems boost private savings at a macro level by converting a government liability into financial wealth managed by private fund managers. How...

dialysis before emergency surgery in a patient treated with dabigatran. Br J Anaesth 2013; 111: 776–7 2 Wanek MR, Horn ET, Elapavaluru S, Baroody SC, Sokos G. Safe use of hemodialysis for dabigatran removal before cardiac surgery. Ann Pharmacother 2012; 46: e21 3 Chang DN, Dager WE, Chin AI. Removal of dabigatran by hemodialysis. Am J Kidney Dis 2013; 61: 487–9 4 Singh T, Maw TT, Henry BL, et a...

This paper studies the dynamics of durable and nondurable consumption under two alternative assumptions about information updating by households – rational inattention and sticky expectations. We first show that the two types of sticky information diffusion can help generate strong excess smoothness in durables consumption. We then find that sticky expectations due to a fixed cost does a better...