Consumption along the life cycle
Subtitle: how different is housing?
By: Fang Yang.
Contributors: Federal Reserve Bank of Minneapolis. Research Dept.
Series: Working paper / Federal Reserve Bank of Minneapolis, Research Dept. ;; 635; Working paper (Federal Reserve Bank of Minneapolis : Online) ;; 635.
Publisher: Federal Reserve Bank of Minneapolis, Research Dept.
Published: 2005
Place of publication: [Minneapolis, MN]
Language: eng
Format: Electronic resource
Description: Micro data over the life cycle shows two different patterns of consumption of housing and non-housing goods: the consumption profile of non-housing goods is hump-shaped while the consumption profile for housing first increases monotonically and then flattens out. This paper develops a rich, quantitative, dynamic general equilibrium model of life cycle behavior, which generates consumption profiles consistent with the observed data. Borrowing constraints are essential in explaining the accumulation of housing assets early in life, while transaction costs are crucial in generating the slow downsizing of the housing later in life. The bequest motives play a role in determining total life time wealth, but not the housing profile.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file (viewed on June 22, 2005).
"May 2005."
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.