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Earnings, Consumption and Lifecycle Choices

Meghir, Costas - 2010

We discuss recent developments in the literature that studies how the dynamics of earnings and wages affect consumption … choices over the life cycle. We start by analyzing the theoretical impact of income changes on consumption - highlighting the … role of persistence, information, size and insurability of changes in economic resources. We next examine the empirical …

Persistent link: https://www.econbiz.de/10012462738

Disentangling the Importance of the Precautionary Saving Mode

Kennickell, Arthur - 2004

We assess the importance of the precautionary saving motive by relying on a direct question about precautionary wealth from the 1995 and 1998 waves of the Survey of Consumer Finances. In this survey, a new question has been designed to elicit the amount of desired precautionary wealth. This...

Persistent link: https://www.econbiz.de/10012467799

Theoretical Foundations of Buffer Stock Saving

Carroll, Christopher - 2004

"Buffer-stock" versions of the dynamic stochastic optimizing model of saving are now standard in the consumption … models, including the existence of a target level of wealth and the proposition that aggregate consumption growth equals …

Persistent link: https://www.econbiz.de/10012467822

Multiple Equilibria in Open Economy Models with Collateral Constraints : Overborrowing Revisited

Schmitt-Grohé, Stephanie - 2016

This paper establishes the existence of multiple equilibria in infinite-horizon open- economy models in which the value of tradable and nontradable endowments serves as collateral. In this environment, the economy displays self-fulfilling financial crises in which pessimistic views about the...

Persistent link: https://www.econbiz.de/10012456411

Optimal Reserves in Financially Closed Economies

Jeanne, Olivier - 2016

Financially closed economies insure themselves against current-account shocks using international reserves. We characterize the optimal management of reserves using an open-economy model of precautionary savings and emphasize several results. First, the welfare-based opportunity cost of reserves...

Persistent link: https://www.econbiz.de/10012456536

Savings After Retirement : A Survey

De Nardi, Mariacristina - 2015

The saving patterns of retired U.S. households pose a challenge to the basic life-cycle model of saving. The observed patterns of out-of-pocket medical expenses, which rise quickly with age and income during retirement, and heterogeneous lifespan risk, can explain a significant portion U.S....

Persistent link: https://www.econbiz.de/10012457399

The Power of Forward Guidance Revisited

McKay, Alisdair - 2015

In recent years, central banks have increasingly turned to "forward guidance" as a central tool of monetary policy, especially as interest rates around the world have hit the zero lower bound. Standard monetary models imply that far future forward guidance is extremely powerful: promises about...

Persistent link: https://www.econbiz.de/10012457784

Macroeconomic Volatility and External Imbalances

Fogli, Alessandra - 2015

Does macroeconomic volatility/uncertainty affects accumulation of net foreign assets? In OECD economies over the period 1970-2012, changes in country specific aggregate volatility are, after controlling for a wide array of factors, significantly positively associated with net foreign asset...

Persistent link: https://www.econbiz.de/10012457794

Annuitized Wealth and Post-Retirement Saving

Laitner, John - 2014

We introduce a tractable model of post-retirement saving behavior in which households have a precautionary motive arising from uninsured health status risks. The model distinguishes between annuitized and non-annuitized wealth, emphasizes the importance of asset composition in determining...

Persistent link: https://www.econbiz.de/10012458118

Precautionary Saving of Chinese and U.S. Households

Choi, Horag - 2014

consumption …

Persistent link: https://www.econbiz.de/10012458138