Using administrative panel data from Norway, we investigate the development of household labor income, financial wealth and asset holdings over a nine-year period surrounding job loss. Consistent with a simple theoretical model, the data show precautionary saving and a shift toward safer assets...

Despite macroeconomic evidence pointing to a negative aggregate consumption response due to political uncertainty, few papers have used microeconomic panel data to analyze how households adjust their consumption after an uncertainty shock. We study household savings and expenditure adjustment...

We identify the causal effect of lump-sum severance payments on non-employment duration in Norway by exploiting a discontinuity in eligibility at age 50. We find that a severance payment worth 1.2 months' earnings at the median lowers the fraction re-employed after a year by six percentage...

The paper explores how repeated revisions of consumption plans increase long-run utility. If agents value present anticipations of future consumption, some revisions may be viewed as a benign form of self-delusion. We consider a minimal generalization of the Samuelson discounted utility model to...

The house price level is a function of buyers’ realized home equity, and buyers’ realized home equity is a function of the house price level. This interdependence follows from the fact that buyers are sellers in the same market. This article examines under what conditions this leads to a...

A dynamic consumption function, where consumption in the long run is determined by households’ disposable income and wealth, has been superior to the Euler equation in explaining the development of Norwegian aggregate consumption over several decades. This period covers the years of financial...

I use new micro data to study the effects of credit deregulation on the Norwegian household savings decline in the mid-1980s. This paper has three main findings. First, the decline in saving started in 1983, a couple of years earlier than previously thought on the basis of National Accounts...

We consider testing for long-run homogeneity within a dynamic consumer demand system allowing for non-stationarities. The static long-run solution is assumed to follow the Linear Almost Ideal Demand System and we test for long-run homogeneity within this system utilizing a triangular...

A precautionary saving model is extended to include old-age pensions and provides the framework for an empirical analysis of the relation between old-age pensions and private consumption. Norwegian macro-data for socioeconomic groups of households are used to estimate consumption functions for...

The present paper uses the model by Campbell and Mankiw (1991) to examine the Norwegian consumer behavior and the role of the financial deregulation during the 1980s. For quarterly data on non-durables and services, we estimate the fraction of current income consumers to be in the range of 37%...