Using data from the Panel Study of Income Dynamics (PSID) we specify, estimate and simulate a dynamic structural model … how consumer behavior responds to house price and income declines as well as tightening credit. These experiments are … motivated by the U.S. recession starting in December of 2007 that saw large falls in home prices, large negative income shocks …

facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of … optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income … that the optimal steady state saving rate is increasing in income risk if and only if the intertemporal elasticity of …

In this paper we argue that very high marginal labor income tax rates are an effective tool for social insurance even …

accumulation in which households face idiosyncratic income risk and cannot commit to repay their debt. Therefore, even though a …

disciplined by US household survey data on income, wealth, education and time use. Studying the transitions induced by unexpected …

In this paper we study the neoclassical growth model with idiosyncratic income risk and aggregate risk in which risk … in equilibrium. With log-utility and idiosyncratic income shocks taking two values one of which is zero (e.g., employment …