Showing 1 - 10 of 17
This paper explores the microfoundations of consumption models and quantifies the macro implications of consumption heterogeneity. We propose a new empirical method to estimate the response of consumption to permanent and transitory income shocks for different groups of households. We then apply...
Persistent link: https://www.econbiz.de/10012834176
In 1960, Working noted that time aggregation of a random walk induces serial correlation in the first difference that is not present in the original series. This important contribution has been overlooked in a recent literature analyzing income and consumption in panel data. I examine Blundell,...
Persistent link: https://www.econbiz.de/10012182399
We explore the role of habit formation in housing in explaining the life-cycle household allocations. Empirical studies about households in the U.S. reveal that the housing profile increases monotonically until age mid-60s and then flattens out. The model is realistically calibrated and solved...
Persistent link: https://www.econbiz.de/10010738028
Euler equation estimation of intertemporal consumption models requires many, often unverifiable assumptions. These include assumptions on expectations and preferences. We aim at reducing some of these requirements by using direct subjective information on respondents’ preferences and...
Persistent link: https://www.econbiz.de/10011092114
Persistent link: https://www.econbiz.de/10011092910
This study proposes a cumulative error correction model where the summing weights follow a geometrically decreasing function of prior deviations from the equilibrium and are estimated from the data. It is shown that this approach nests both the traditional error correction model – where no...
Persistent link: https://www.econbiz.de/10010636324
This paper studies the empirical relationship between consumption and saving under two different sources of uncertainty: financial risk and environmental risk. The analysis is carried out using time series data for six advanced economies in the period 1965–2007.
Persistent link: https://www.econbiz.de/10010608252
We study the trend in household income uncertainty using a novel approach that measures income uncertainty as the variance of forecast errors at each future horizon separately without imposing parametric restrictions on the underlying income shocks. We find that household income uncertainty has...
Persistent link: https://www.econbiz.de/10013124992
Gambling behavior can serve as an informative indicator of important household heterogeneity that is difficult to observe directly in data. We present, to the best of our knowledge, the first comprehensive study of the consumption and personal finance of gamblers using a nationwide...
Persistent link: https://www.econbiz.de/10013106836
The downturn in economic activity in the U.S. that began in December 2007 (as determined by researchers with the National Bureau of Economic Research) has been noticeably deeper and has already lasted considerably longer than the prior two recessions - those beginning in July 1990 and in March...
Persistent link: https://www.econbiz.de/10013128716