Guvenen, Fatih - In: Review of Economic Dynamics 12 (2009) 1, pp. 58-79
process in the current literature. The first view, which we call the "Restricted Income Profiles" (RIP) process, holds that … individuals are subject to large and very persistent shocks, while facing similar life-cycle income profiles. The alternative view …, which we call the "Heterogeneous Income Profiles" (HIP) process, holds that individuals are subject to income shocks with …