Consumer Default and the Life Cycle Model
在生命周期模型中引入违约选项，分析其对消费决策的影响，发现违约选项导致预算集和无差异曲线出现拐点，从而显著改变最优消费路径，并探讨流动性约束出现的条件及受约束借款人的特征。
This paper studies the impact of a default option on life-cycle consumption. Using a two period life-cycle model with uncertain income, the paper demonstrates that a default option causes a kink in both the budget set and the indifference curve at the point where the individual switches from saving to borrowing. This nonconvexity can have a dramatic impact on optimal consumption. The paper also explores the circumstances under which liquidity constraints are likely to emerge and the characteristics of those borrowers who are likely to face constraints. Copyright 1995 by Ohio State University Press.