households. Aggregate shocks through their impact on the spread give rise to consumption inequality. We show this mechanism to be …

and hours) in response to shocks. We develop a theoretical model to understand how firms choose between different ways to … the shock (positive or negative), its size and persistence. In 2010-13, firms responding to negative shocks were most … response to positive shocks in 2010-13, firms were more likely to increase wages, followed by increases in employment and then …