liquiditylife

An open-source Python package for liquidity-aware life-cycle portfolio choice.

Overview

liquiditylife implements a life-cycle portfolio choice model inspired by Adams (2026), featuring:

Risky labor income correlated with stock-market crashes
Asymmetric consumption adjustment frictions
Time-varying equity premium with return predictability
Illiquid savings during working life and retirement flow income

Quick Start

from liquiditylife.calibrations import load_calibration
from liquiditylife.solve import solve_model
from liquiditylife.simulate import simulate_cohorts

cal = load_calibration("adams_high_friction")
solution = solve_model(cal)
sim = simulate_cohorts(solution, n_households=10_000, seed=42)

Installation

pip install liquiditylife

Citation

Adams, Patrick. "Stocks for the Long Run or Liquidity? Tax Data Evidence and Portfolio Choice Implications." MIT Sloan School of Management, January 7, 2026. https://patrick-adams.com/jmp