Life cycle saving: Insights from the perspective of bounded rationality

J. Binswanger

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper provides a new life cycle model that takes into account key elements of bounded rationality. The paper shows that the model can account for patterns in the data that are hard to explain by the standard life cycle model. Among other patterns, the model predicts that, typically, the young either hold no equity or their equity portfolio share is rather low and then increases over working life. The analytical solution of the model demonstrates its high degree of tractability.
Original languageEnglish
Pages (from-to)605-623
JournalEuropean Economic Review
Volume56
Issue number3
DOIs
Publication statusPublished - 2012

    Fingerprint

Cite this