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uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … households would pay more attention to capital income risk if they have (i) lower initial wealth endowment, (ii) lower marginal …
Persistent link: https://www.econbiz.de/10012892117
risk of workers, which mitigates their precautionary savings motive. Using a quantitative model analysis, we show that this … recessions. First, we show that the consumption risk of short-time work is considerably smaller compared to unemployment using …
Persistent link: https://www.econbiz.de/10014079142
of savings, precautionary savings, loss aversion, and risk. We provide the relevant theory, followed by empirical tests …We consider a simple, two period, consumption-savings model with future income uncertainty that examines the interplay … present bias. We predict, and show empirically, that loss aversion reduces savings, and that those who are more loss averse …
Persistent link: https://www.econbiz.de/10014346247
We study optimal savings in continuous time with exogenous transitions between employment and unemployment as the only …
Persistent link: https://www.econbiz.de/10012892186
This paper establishes new evidence on the cyclical behaviour of household income risk in Great Britain and assesses …. We then estimate how income risk, measured by the variance and the skewness of the probability distribution of shocks to … the role of social insurance policy in mitigating against this risk. We address these issues using the British Household …
Persistent link: https://www.econbiz.de/10012872060
for the future (global savings glut). Low growth is linked to slowing population growth and a declining marginal …, from the perspective of Austrian business cycle theory, interest rates were step by step decreased by central banks to … nihilo and the need of time to produce capital invalidates the IS identity assumed in the Keynesian theory to hold …
Persistent link: https://www.econbiz.de/10012858697
Monetary policy shocks have a large impact on aggregate stock market returns in narrow event windows around press releases by the Federal Open Market Committee. We use spatial autoregressions to decompose the overall effect of monetary policy shocks into a direct (demand) effect and an indirect...
Persistent link: https://www.econbiz.de/10011698653
Rising income inequality since the 1980s in the United States has generated a substantial increase in saving by the top … of the income distribution, which we call the saving glut of the rich. The saving glut of the rich has been as large as … across states shows that the rise in top income shares can explain almost all of the accumulation of household debt held as a …
Persistent link: https://www.econbiz.de/10012837475
Releases of key macroeconomic indicators are closely watched by financial markets. We investigate the role of expectation dispersion and economic uncertainty for the stock-market reaction to indicator releases. We find that the strength of the financial market response to news decreases with the...
Persistent link: https://www.econbiz.de/10013251271
asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal …
Persistent link: https://www.econbiz.de/10012892192