transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX … repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable lifecycle … evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in …

Neoclassical economic theory rules out systematic errors in consumption choice. According to the basic view … makes it impossible to detect and understand sub-optimal consumption decisions, due to problems of self-control and the …

Many households have insufficient savings to handle moderate and routine consumption shocks. Many of these financially …

of disposable income. We use household-level data to explain why households are postponing consumption despite rapid … income growth. Tracing cohorts over time indicates a virtual absence of consumption smoothing over the life cycle. The age …

novel two-step estimation procedure that allows applying instrumental variable regressions with ordinal observable data. As …

incentive to save and fewer private resources are used for consumption smoothing during unemployment. Our results show that in a …We study asset-tested unemployment insurance in an incomplete markets model with moral hazard during job search. Asset … testing has two counteracting effects on welfare. On the one hand, it improves consumption insurance by introducing state …

how easier home financing and higher homeownership rates increase unemployment rates. To this purpose we build a model of … job search with liquid wealth accumulation and consumption of housing that can be rented, bought on credit, or sold. In … decline while job loss rates increase, causing the overall unemployment rate to rise. We estimate this model structurally …