The Life-Cycle Model of Consumption and Saving

Martin Browning and Thomas Crossley ()

Journal of Economic Perspectives, 2001, vol. 15, issue 3, 3-22

Abstract: A central implication of life-cycle models is that agents smooth consumption. We review the empirical evidence on smoothing at frequencies from within the year up to across a lifetime. We find that life-cycle models--particular those which incorporate realistic features of markets and goods--have more empirical successes than failures. We also show that some apparent deviations from theoretical predictions imply very small welfare losses for agents. Finally, we emphasize that the coherence of life-cycle models imposes an important discipline when incorporating new features into models.

JEL-codes: D91 E21 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/jep.15.3.3
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (325)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jep.15.3.3 (application/pdf)

Related works:
Working Paper: The life-cycle model of consumption and saving (2001)
Working Paper: The Life Cycle Model of Consumption and Saving (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:15:y:2001:i:3:p:3-22

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().