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Optimal Investment, Consumption and Retirement Decision with Disutility and Liquidity Constraints

초록

영어

In this paper we consider general consumption, portfolio and retirement optimization problems in which a working investor has liquidity constraints. Closed-form solutions are obtained for the utility maximization problems and numerical procedures are given for the general utility function under the liquidity constraints. The numerical results for a special utility function, for example, the constant relative risk aversion(CRRA) utility function, suggest that the restriction to borrow future income makes the investor retire in a lower critical wealth level than in the case of no liquidity constraints.

목차

Abstract
 1 Introduction
 2 The Financial Market Setup
 3 The Optimization Problem
 4 The Optimal Values
 5 Optimal Policies Under a CRRA Utility Class (Numerical Approaches)
 6 Concluding Remarks
  A Duality Approaches
  B Solutions to the Problem
  C Proof of Theorem 4.2
 References

저자정보

  • Byung Hwa Lim Department of Mathematical Science, KAIST, Daejeon, 305701, Republic of Korea
  • Yong Hyun Shin Financial Engineering Research Center(FERC), KAIST Business School, Seoul, 130722, Republic of Korea.

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