Showing 1 - 10 of 13
All empirical models of earnings processes in the literature assume agood deal of homogeneity. In contrast to this we model earnings processesallowing for lots of heterogeneity between agents. We also introduce an ex-tension to the linear ARMA model that allows that the initial convergenceto the...
Persistent link: https://www.econbiz.de/10005870162
All empirical models of earnings processes in the literature assume a good deal of homogeneity. In contrast to this we model earnings processes allowing for lots of heterogeneity between agents. We also introduce an extension to the linear ARMA model that allows that the initial convergence to...
Persistent link: https://www.econbiz.de/10005047875
Recent research on earnings dynamics reveals a great deal of heterogeneity in all parameters that govern underlying processes. In particular, there appears to be considerable heterogeneity in the trend, with some workers having a strong positive trend, and other having no trend, or, even a...
Persistent link: https://www.econbiz.de/10010554346
We consider the decomposition of shocks to a dynamic process into a persistent and a transitory component. Without additional assumptions (such as zero correlation) the decomposition of shocks into a persistent and transitory component is indeterminate. The assumption that is conventional in the...
Persistent link: https://www.econbiz.de/10011599665
Several recent papers have concluded that precautionary saving motives are needed to reconcile data on lifetime patterns of consumption and income with a standard optimising model. In this paper we contest that we necessarily need a precautionary motive and we show that if we take consumption to...
Persistent link: https://www.econbiz.de/10005543453
We consider the decomposition of shocks to a dynamic process into a persistent and a transitory component. Without additional assumptions (such as zero correlation) the decomposition of shocks into a persistent and transitory component is indeterminate. The assumption that is conventional in the...
Persistent link: https://www.econbiz.de/10011160865
We model earnings processes allowing for lots of heterogeneity across agents. We also introduce an extension to the linear ARMA model which allows the initial convergence in the long run to be different from that implied by the conventional ARMA model. This is particularly important for unit...
Persistent link: https://www.econbiz.de/10010970114
In this article, we survey the literature on individual earnings dynamics with a particular focus on allowing for pervasive heterogeneity across individuals. We structure the discussion around ARMA processes with nonlinear trends for each individual. We show that allowing for pervasive and...
Persistent link: https://www.econbiz.de/10011004690
Consumption by couples rises sharply in the beginning and falls later in life; the causes of the early rise are hotly contested. Among the suggestions are rule of thumb behavior, demographics, liquidity constraints, the precautionary motive, and nonseparabilities between consumption and labor...
Persistent link: https://www.econbiz.de/10005740735
All empirical models of earnings processes in the literature assume a good deal of homogeneity. For example, all authors assume either that everyone has a unit root process or that everyone has a stationary process. In contrast to this we model earnings processes allowing for lots of...
Persistent link: https://www.econbiz.de/10005749460