Seminario CEDE - Hernán Vallejo

This article presents a theory of lifetime welfare, considering the corresponding cycles, trends, and span. The model suggests that economic agents should focus more on smoothing the mean welfare of individuals than on smoothing their consumption and their income, since they are not the same. Given that private and public decisions can generate internalities and externalities, and thus, inefficiencies, these results can justify individual, social, and Government interventions, for example in lifestyle, and the education, health, pension, and insurance markets.