Humps and bumps in lifetime consumption

In this article we argue that the life-cycle model that allows demographics to affect household preferences and relaxes the assumption of certainty eq uivalence can generate hump-shaped consumption profiles over age that are v ery similar to those observed in household-level data sources and, in parti cular, match the differences in shape across different education groups. Li quidity constraints or myopia are not required to explain the empirical fea tures of observed life-cycle patterns.