by Summary:
In his blog, John Cochrane discusses plausible features of habit models (that some other models share): Consumption moves more with income in bad times. In bad times, consumers start to pay inordinate attention to rare bad states of nature. [The habit model] also gives a natural account of endogenous time-varying attention to rare events.
Topics:
Dirk Niepelt considers the following as important: Asset price, Habit, Notes, risk aversion
This could be interesting, too:
In his blog, John Cochrane discusses plausible features of habit models (that some other models share): Consumption moves more with income in bad times. In bad times, consumers start to pay inordinate attention to rare bad states of nature. [The habit model] also gives a natural account of endogenous time-varying attention to rare events.
Topics:
Dirk Niepelt considers the following as important: Asset price, Habit, Notes, risk aversion
This could be interesting, too:
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In his blog, John Cochrane discusses plausible features of habit models (that some other models share):
Consumption moves more with income in bad times.
In bad times, consumers start to pay inordinate attention to rare bad states of nature.
[The habit model] also gives a natural account of endogenous time-varying attention to rare events.