TY  - BOOK
AU  - Howitt,Peter
AU  - Özak,Ömer
ED  - National Bureau of Economic Research.
TI  - Adaptive Consumption Behavior
T2  - NBER working paper series
PY  - 2009///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - October 2009; Hardcopy version available to institutional subscribers
N2  - This paper proposes and studies a theory of adaptive consumption behavior under income uncertainty and liquidity constraints. We assume that consumption is governed by a linear function of wealth, whose coefficients are revised each period by a procedure, which, although sophisticated, places few informational or computational demands on the consumer. We show that under a variety of settings, our procedure converges quickly to a set of coefficients with low welfare cost relative to a fully optimal nonlinear consumption function
UR  - https://www.nber.org/papers/w15427
UR  - http://dx.doi.org/10.3386/w15427
ER  -