Optimal Consumption and Savings with Stochastic Income and Recursive Utility
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We develop a tractable incomplete-markets model with an earnings process Y subject to permanent shocks and borrowing constraints. Financial frictions cause the marginal (certainty equivalent) value of wealth W to be greater than unity and decrease with liquidity w = W/Y. Additionally, financial
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美国国家经济研究局创建时间:
2013-08-01



