We study the role of idiosyncratic income shocks for aggregate fluctuations within a simple heterogeneous household … framework with no binding borrowing constraints. We show that the presence of idiosyncratic income shocks affects the economy …'s response to an aggregate shock in a way that can be captured by a consumption weighted average of the changes in uncertainty …

earnings shocks and find important asymmetries: positive shocks to high-income individuals are quite transitory, whereas … negative shocks are very persistent; the opposite is true for low-income individuals. Finally, we use these rich sets of …

unconditional cross-sectional moments of household consumption growth and the moments of the risk-free rate, equity premium, price …-dividend ratio, and aggregate dividend and consumption growth. The model-implied risk-free rate and price-dividend ratio are … procyclical while the market return has countercyclical mean and variance. Finally, household consumption risk explains the cross …

This paper studies the cyclical nature of individual income risk using a confidential dataset from the U.S. Social … end of the shock distribution collapses--large upward income movements become less likely--whereas the bottom end expands … average earnings (which is not the case during expansions). Finally, we find that the cyclical nature of income risk is …

accumulation in which households face idiosyncratic income risk and cannot commit to repay their debt. Therefore, even though a …

-family relations and focus on households as collections of roommates. The model's mechanism is that rising income leads to a falling … size, consumption patterns, and income in the cross-section at the end of the 20th century. We then project the model back … to 1850 by changing income. We find that our proposed mechanism can account for 37 percent of the decline in the number …

subsequently exhibit high income. I re-examine this puzzle in California, where most Asians settled historically. Asians achieved …