We provide a price theory for incomplete markets that extends the traditional Walrasian analysis. We derive formulas expressing the consumption response to current and future changes in interest rates and income. Our analysis provides a natural decomposition of these responses into substitution...

Households' and firms' subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, the patterns they display, their determinants, and how they shape households' and firms' economic...

We study differences in economic outcomes by perceived skin tone among African Americans using full-count U.S. decennial census data from the late-19th and early-20th centuries. Comparing children coded as "Black" or "Mulatto" by census enumerators and linking these children across population...

Despite extensive use of bargaining models in economics and despite Becker's insistence on the importance of altruism in families, the theoretical literature on bargaining ignores altruism and assumes that everyone is an egoist. This paper shows that incorporating altruism into cooperative...

Efficient diffusion of economic information plays a critical role in the functioning of society, and, more specifically, households. We study information diffusion between spouses in a representative sample of the German population. We focus on an important economic belief: the household's...

Most empirical work in economics has considered only a narrow set of measures as meaningful and useful to characterize individual behavior, a restriction justified by the difficulties in collecting a wider set. However, this approach often forces the use of strong assumptions to estimate the...

This paper leverages the universe of U.S. tax data and state lottery wins between 2000 and 2019 to estimate the causal effect of financial resources on three key lifecycle outcomes for young adults. We find large and persistent effects on homeownership, with a response function that exhibits...

Most studies of intrahousehold resource allocation examine outcomes and do not consider the decision-making process by which those outcomes are achieved. We conduct an original lab-in-the-field experiment on the decision-making process of married couples over the allocation of rival and...

This paper studies the mechanisms and the extent to which parental wage risk passes through to children's skill development. Through a quantitative dynamic labor supply model in which two parents choose whether to work short or long hours or not work at all, time spent with children, and...

The provision of long-term care (LTC) for senior citizens in Italy is at the center of the recent policy debate. Italy has witnessed a spectacular increase in the share of people aged 65 and over and in particular of people aged 80 and over, which could translate in large increases in the number...