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Life cycle model and health risk
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Orientador(es)
Resumo(s)
Life-cycle theory explains how an individual will allocate his wealth throughout his life. So far, research has been developed with empirical evidence diverging from model predictions. Recently, health has been introduced as a source of background risk but the main focus has been the retirement period. I will present here a simple model with health risk, showing how it impacts the choice of the young agent. I find that the wealthier and unhealthier the agent is, the less he will invest in the risky asset.
Descrição
Palavras-chave
Life-cycle model health risk Risky asset