Target saving in an overlapping generations model

• Main Authors: Guha, Brishti, GUHA, Ashok S.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2008
• Subjects: target saving; history; excess sensitivity; static expectations; rational expectations; uniqueness; Behavioral Economics; Macroeconomics
• Online Access: https://ink.library.smu.edu.sg/soe_research/2261; https://ink.library.smu.edu.sg/context/soe_research/article/3260/viewcontent/Target_Saving_in_an_Overlapping_Generations_Model_pp.pdf
• Institution: Singapore Management University

We examine a model in which the utility function has been engineered so that it is optimal for consumers to aim for a fixed target level of retirement resources. In this case, consumption displays excess sensitivity to current income as well as perfect old age insurance. In an overlapping generation...