Journal Article

Wealth Effects with Endogenous Retirement


Abstract: In this article, we study wealth effects, i.e., the response of consumption to exogenous changes in wealth. We use a consumption-saving model with endogenous retirement to show that the endogenous response of the value of a worker's human capital to changes in her wealth helps to account for the weak wealth effects observed in the data.

Keywords: consumption-saving; retirement; wealth effects;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Economic Quarterly

Publication Date: 2019

Issue: 3Q

Pages: 173-200