Labour income follows a deterministic growth trend and fluctuates between two values. Interest rates are drawn …

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 …

percent of mean income. In this paper we use economic theory to determine the relation between the appropriate make …Courts typically base compensation for loss of income in personal injury cases on either mean or median work income …. Yet, quantatively, mean and median incomes are typically very different. For example, in the US median income is 65 …

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 …

transitory income (e.g., from a stimulus check) is higher under non-Gaussian earnings risk. … idiosyncratic risk implied by the benchmark process is between two-to-four times higher than the canonical Gaussian one. Third, the … standard method in the literature for measuring the pass-through of income shocks to consumption—can significantly overstate …

of optimal risk-sharing in mortgage contracts. But since only a small literature has studied this question, more research … termination via prepayment or default affects optimal risk-sharing. The broad conclusion of the analysis is that potential … mortgage termination makes higher risk exposure for borrowers optimal. …

-shaped profile by age. Third, we show how credit card debt has evolved along the income distribution. Finally, we document a large …

large increase in earned income, employment, assets, real estate, secured debt, home ownership, and wealth that persists for … increase in earned income. …

likely to differ in their tolerance for risk. In this paper, I investigate a contracting scheme designed to mitigate the … asymmetric information problem where agents are heterogeneous in their tolerance for risk. Mechanisms that recognize the …' private information about risk tolerance, offer a sensible way to approach the problem. These contracts are generally a …

conventional contract theory. Our three key insights are: First, inequity aversion plays a crucial role in the design of optimal …