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Preferences for Risk in Dynamic Models with Adjustment Costs
Vereshchagina, Galina - In: Review of Economic Dynamics 17 (2014) 1, pp. 86-106
This paper characterizes the solution to a consumption/savings decision problem in which one of the consumption goods involves transaction costs. It then analyzes how such adjustment costs affect consumers' risk attitudes. Previous studies have suggested that transaction costs, by resulting in...
Persistent link: https://www.econbiz.de/10010729239
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Growth and Crisis, Unavoidable Connection?
Piazza, Roberto - In: Review of Economic Dynamics 17 (2014) 4, pp. 677-706
Periods of economic boom with rapid credit and GDP growth can be followed by sudden busts. In the presence of financial … markets imperfections, a simple modification of a neoclassical growth model can fully account for this behavior. I study a … growth model for a small open economy where decreasing marginal returns to capital appear after the country has reached a …
Persistent link: https://www.econbiz.de/10010945614
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On the Evolution of the US Consumer Wealth Distribution
Hintermaier, Thomas; Koeniger, Winfried - In: Review of Economic Dynamics 14 (2011) 2, pp. 317-338
We use all available waves of the Survey of Consumer Finances to document the evolution of the wealth distribution in the US since the 1980s. Relying on the shape of this distribution we then estimate a life-cycle incomplete markets model. We find that considering a wide range of net worth...
Persistent link: https://www.econbiz.de/10008670383
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Quantitative Analysis of Health Insurance Reform: Separating Regulation from Redistribution
Pashchenko, Svetlana; Porapakkarm, Ponpoje - In: Review of Economic Dynamics 16 (2013) 3, pp. 383-404
Two key components of the recent U.S. health reform are a new regulation of the individual health insurance market and an increase in income redistribution in the economy. Which component contributes more to the welfare outcome of the reform? We address this question by constructing a general...
Persistent link: https://www.econbiz.de/10010856601
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Complete Markets Strikes Back: Is the Reduced-form Measure of Consumption Insurance Reliable?
Sun, Gang - In: Review of Economic Dynamics
consistent with a complete market model, both qualitatively and quantitatively, if the household income growth rate is positively … correlated with patience. I also find that this model can simultaneously match the empirical increase of consumption dispersion …
Persistent link: https://www.econbiz.de/10011115652
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On the Persistence of Income Shocks over the Life Cycle: Evidence, Theory, and Implications
Karahan, Fatih; Ozkan, Serdar - In: Review of Economic Dynamics 16 (2013) 3, pp. 452-476
sort into better jobs and settle down as they age; in turn, magnitudes of wage growth rates decline, thereby decreasing the …
Persistent link: https://www.econbiz.de/10011133629
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Innovations in Information Technology and the Mortgage Market
Guler, Bulent - In: Review of Economic Dynamics
In this paper I analyze the effects of innovations in information technology on the mortgage and housing markets using a life-cycle model with incomplete markets and idiosyncratic income, as well as moving and house price shocks. I explicitly model the housing tenure choices of households....
Persistent link: https://www.econbiz.de/10011103247
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Saving Rates and Portfolio Choice with Subsistence Consumption
Achury, Carolina; Hubar, Sylwia; Koulovatianos, Christos - In: Review of Economic Dynamics 15 (2012) 1, pp. 108-126
We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the...
Persistent link: https://www.econbiz.de/10008828681
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Interpreting Life Cycle Inequality Patterns as an Efficient Allocation: Mission Impossible?
Badel, Alejandro; Huggett, Mark - In: Review of Economic Dynamics 17 (2014) 4, pp. 613-629
The life-cycle patterns of consumption, wage and hours inequality observed in U.S. cross-section data are commonly viewed as incompatible with a Pareto efficient allocation. We determine the extent to which these qualitative and quantitative patterns can or cannot be produced by Pareto efficient...
Persistent link: https://www.econbiz.de/10010945607
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Cross Sectional Facts for Macroeconomists
Krueger, Dirk; Perri, Fabrizio; Pistaferri, Luigi; … - In: Review of Economic Dynamics 13 (2010) 1, pp. 1-14
This paper provides an introduction to the special issue of the Review of Economic Dynamics on "Cross Sectional Facts for Macroeconomists''. The issue documents, for nine countries, the level and the evolution, over time and over the life cycle, of several dimensions of economic inequality,...
Persistent link: https://www.econbiz.de/10008487510