Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence
用数值方法近似求解常相对风险厌恶效用下随机劳动收入的最优消费，发现消费函数常与确定性等价解大不相同，有助于解释消费对暂时收入过度敏感、低利率下高消费增长和老年人消费不足三大实证谜题。
No one has derived closed-form solutions for consumption with stochastic labor income and constant relative risk aversion utility. A numerical technique is used here to give an accurate approximation to the solution. The resulting consumption function is often dramatically different than the certainty equivalence solution typically used, in which consumption is proportional to the sum of financial wealth and the present value of expected future income. The results help explain three important empirical consumption puzzles: excess sensitivity of consumption to transitory income, high growth of consumption in the presence of a low risk-free interest rate, and underspending of the elderly.