Consumption and Saving: Models of Intertemporal Allocation and their Implications for Public Policy

Orazio P. Attanasio Guglielmo Weber (2010) - Consumption and Saving: Models of Intertemporal Allocation and their Implications for Public Policy, NBER Working Paper 15756

This paper provides a critical survey of the large literature on the life cycle model of consumption,
both from an empirical and a theoretical point of view. It discusses several approaches that have been
taken in the literature to bring the model to the data, their empirical successes and failures. Finally,
the paper reviews a number of changes to the standard life cycle model that could help solve the remaining
empirical puzzles.