Based on the households' utility maximisation, a closed form approximation of the consumption function is derived and … the deep parameters of the consumption function are estimated using aggregate euro area data. The novel element in our … lot of information on future income changes, but that also lagged consumption, through habit formation, plays an important …

stock' model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model … is affected by the gap between `target' and actual wealth, with the target wealth determined by credit conditions and … saving rate's long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business …

We revisit the transmission mechanism of monetary policy for household consumption in a Heterogeneous Agent New … Keynesian (HANK) model. The model yields empirically realistic distributions of household wealth and marginal propensities to … intertemporal substitution drives virtually all of the transmission from interest rates to consumption. …

This paper studies the effect of deep recessions on intergenerational inequality by quantifying the welfare effects on … wealth, the latter determines labour income losses and destroys the human capital of younger cohorts, lowering their …' consumption and portfolio composition between 2007 and 2013 in the US are consistent with the predictions of the model. …

For most academics and policy makers, the depth of the 2007-09 financial crisis, its longevity and its impacts on the … sentiment and consumption expenditures for the United States and the euro area. It shows under which circumstances confidence … indicators can be a good predictor of household consumption even after controlling for information in economic fundamentals …

consumption and real GDP. In line with BNW, we find that confidence shocks explain a large share of the variance in real economic …

labor and capital, higher intertemporal elasticity of substitution in consumption, reforms aiming at increasing the relative …