Publications
Detailed Information
Wealth and Optimal Consumption of Retired Consumer
Cited 0 time in
Web of Science
Cited 0 time in Scopus
- Authors
- Issue Date
- 1991-01
- Citation
- Seoul Journal of Economics, Vol.4 No.1, pp. 21-50
- Keywords
- consumption plan ; multivariate analysis ; Kessler ; Masson
- Abstract
- In testing the life cycle theory of saving, the question
whether the bequest motive is a significant determinant of saving
has become a controversial issue. Someone argue that if the
wealth of the retired consumers declines at a slow rate, it is an
indication of existence of a significant bequest motive or it is
because of uncertainty of expected life span. In this paper,
optimal consumption path is calculated, and some simulated results
are presented on the time path of wealth for retired consumers.
It is shown that if wealth is measured in nominal
values, the wealth curve can take increasing and decreasing
shapes depending upon the expected life span, the rate of interest,
and the growth rate of consumption, irrespective of significance
of the bequest motive. Thus, the rate of decumulation
of nominal wealth alone cannot be used as evidence for significance
or insignificance of the bequest motive.
- ISSN
- 1225-0279
- Language
- English
- Files in This Item:
Item View & Download Count
Items in S-Space are protected by copyright, with all rights reserved, unless otherwise indicated.