The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Consumer Expenditure (New Developments and the State of Research)

  • Orazio P. Attanasio
  • Guglielmo Weber
Reference work entry


We provide an overview of recent developments in the life-cycle permanent income model under uncertainty, starting from the certainty equivalence case, and considering precautionary saving, the workings of insurance and credit markets, and non-standard preference structures.


Aggregate consumption Aggregate saving Asset pricing Asymmetric information Buffer stocks Certainty equivalence Commitment Consumer expenditure Consumer expenditure (New developments and the state of research) Consumption function Durable goods Elasticity of intertemporal substitution Equity premium puzzle Euler equation Excess sensitivity Excess smoothness of consumption Expected utility Financial asset accumulation Financial market imperfections Habits Impatience Interest rate Intertemporal optimization Intertemporal prices Labour supply Lagrange multipliers Life cycle hypothesis Liquidity constraints Marginal utility of consumption Marginal utility of wealth Myopia Non-convexity Perfect insurance Permanent income life-cycle model Power utility Precautionary savings Preferences Private information Prudence Public finance Quadratic utility Quasi-hyperbolic discounting Real business cycles Reduced form equations Retirement Risk Risk aversion Saving Social insurance Social Security in the United States Stone–Geary utility Subjective discount rate Time preference Transaction costs Uncertainty 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Orazio P. Attanasio
    • 1
  • Guglielmo Weber
    • 1
  1. 1.