We revisit the alleged retirement consumption puzzle. According to the life-cycle theory, foreseeable income reductions …-cycle theory. For retirees we also find significant effects of the income reduction at retirement on housing. However, the effects … endowments after retirement, the theory does predict a fall of total market consumption expenditures. In order not to mistake …

Using German panel data, we assess the causal effect of job loss, and thus of an extensive income shock, on risk … attitude. In line with predictions of expected utility reasoning about absolute risk aversion, losing oneś job reduces the … perceives the threat of job loss and is of a transitory nature. The change in stated risk attitude matches observable job …

In this paper I study a model of life-cycle consumption in which individuals react optimally to their own income … process but ignore economy wide information. Since individual income is less persistent than aggregate income consumers will … react too little to aggregate income variation. Aggregate consumption will be excessively smooth. Since aggregate …

We decompose permanent earnings risk into contributions from hours and wage shocks. To distinguish between hours shocks …-cycle model of consumption and labor supply. Both permanent wage and hours shocks are important to explain earnings risk, but wage … shocks have greater relevance. Progressive taxation strongly attenuates cross-sectional earnings risk, its life …

We extend the canonical income process with persistent and transitory risk to shock distributions with left …-skewness and excess kurtosis, to which we refer as higher-order risk. We estimate our extended income process by GMM for household … show that in a standard incomplete-markets life-cycle model, first, higher-order risk has sizable welfare implications …

. This study adds to the discussion by providing causal estimates for the effect of transfer receipt on the savings behavior … of households. The model allows for dynamic adjustment and variations in the savings behavior over the wealth … transfer volume, the transfer incidence over the wealth distribution and the effect of the savings behavior. The results are …

This paper considers the intertemporal consumption/savings decision when income follows a random walk with drift and … posterior for the drift coefficient and future income. This parameter uncertainty increases by an order of magnitude the … uncertainty of future income over that generated by unknown future shocks to income and can lead agents to have much more …

portion of the evolution of U.S. house prices during the past 20 years can be reproduced when expectations of future income … corresponding changes in house prices, since the value of housing must be linked to expected aggregate income. Only since about 2005 …