Cover

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Title Page, Copyright

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pp. i-iv

Contents

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pp. v-vi

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Foreword

Richard Blundell

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pp. vii-viii

Forward-looking behavior is at the heart of economics. Choices over savings, occupations, earnings, investments, etc., all require forward planning under uncertainty. Just how individuals and firms go about doing...

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Preface

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pp. ix-xiii

When Richard Blundell asked me to give the Gorman Lectures, I instantly accepted, but it raised the question of whether there was any common theme in my current research. In addition to my career-long struggle...

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1 Basic Analysis of Forward-Looking Decision Making

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pp. 1-9

Individuals and families make the key decisions that determine the future of the economy. The decisions involve balancing current sacrifice against future benefits. People decide how much to invest in health care, exercise, and good diet,...

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2 Research on Properties of Preferences

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pp. 10-22

The studies in this book use information about preferences from research on individual behavior. Consider the standard intertemporal consumption–hours problem without unemployment,...

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3 Health

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pp. 23-41

In the American health system, families make some of the important decisions about health spending. They do so directly by some choices about when to seek care, and more indirectly as voices at their employers, who make choices about...

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4 Insurance

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pp. 42-49

The study of insurance fits naturally into a dynamic program. The family’s value function is almost always concave in wealth, so the family will want to trade a small payment made with certainty—the insurance premium—to avoid...

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5 Employment

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pp. 50-69

Dynamic choices of families are central to aggregate movements of key variables: hours of work, the employment rate, and consumption. This chapter asks how far the received principles of family choice can take the economist in understanding...

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6 Idiosyncratic Risk

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pp. 70-86

Like chapter 3, this chapter considers the burden on the individual or family from lack of insurance. In chapter 3, people did not buy insurance even though it was available—and even subsidized, in the case of women. In this chapter...

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7 Financial Stability with Government-Guaranteed Debt

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pp. 87-118

In modern economies, the government guarantees the debt of many borrowers. In a few cases, the promise is explicit; in others it is implicit but known to be likely; and in others, the guarantee occurs because the alternative is immediate collapse...

References

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pp. 119-122

Index

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pp. 123-126