Journal Title
Title of Journal: Decisions Econ Finan
|
Abbravation: Decisions in Economics and Finance
|
|
|
|
|
|
|
|
Authors: Aihua Zhang
Publish Date: 2010/05/15
Volume: 33, Issue: 2, Pages: 149-167
Abstract
In this paper we study the consumption labor supply and portfolio decisions of an infinitely lived individual who receives a certain wage rate and income from investment into a risky asset and a riskfree bond Uncertainty about labor income arises endogenously because labor supply evolves randomly over time in response to changes in financial wealth We derive closedform solutions for optimal consumption labor supply and investment strategy We find that deferring the retirement age stimulates optimal consumption over time and discourages optimal labor supply during the working life We also find explicitly that optimal portfolio allocation becomes more ‘conservative’ when the individual approaches his prescribed retirement age The effects of riskaversion coefficients on optimal decisions are examined
Keywords:
.
|
Other Papers In This Journal:
|