In this paper we study the neoclassical growth model with idiosyncratic income risk and aggregate risk in which risk … pay off depending on both idiosyncratic and aggregate risk, but limited commitment rules out that households sell these … conditions under which it has lower/higher risk premia than the corresponding representative agent version of the model …

condition derived herein, observable shocks are fully shared. The model, therefore, can generate the low degree of risk sharing …

of theory and data …

aggregate risk. We show that trading frictions can simultaneously explain (1) household-level consumption behavior such as high …

consumption between 2006 and 2009. Using household-level data, we show that in addition to a direct effect of changes in house …

household resource risk …We use panel data from the Italian Survey of Household Income and Wealth from 1991 to 2016 to document empirically what … components of the household budget constraint change in response to shocks to household labor income, both over shorter and over …

-making processes across households (the "why"). The combination of the quantitative estimation of household response dynamics with a … qualitative exploration of the mental models employed during financial decisions provides a more complete view of household … showing significant variability. However, MPDs play a critical role in household financial adjustments and display …

, especially for some subgroups. Household finance researchers must look beyond precautionary savings to understand how families … cope with risk. We also find evidence of a "pecking order" of coping methods in which savings appears to be first in the …