We test for precautionary saving and excess sensitivity of consumption to predicted income growth using a 1989-93 panel survey of Italian households that has measures of subjective income and inflation expectations. These expectations provide a powerful instrument for predicting income growth....

We test for excess sensitivity of consumption to predicted income growth using a 1989–93 panel survey of Italian households that includes measures of subjective income and inflation expectations. These expectations provide a powerful instrument for predicting income growth. Controlling for the...

In this paper I estimate the age-wealth profile under two different identification assumptions about age, cohort and time effects. According to the life-cycle model, the two set of assumptions should yield similar age-wealth profiles. Using the 1984-1993 Italian Survey of Household Income and...

The life-cycle hypothesis posits that saving is positive for young households and negative for the retired, so that wealth should be hump-shaped. Yet, if one looks at the microeconomic evidence on saving by age, dissaving by the elderly is limited or absent. But the saving measures usually...

We use data from the 2009 Internet Survey of the Health and Retirement Study to examine the consumption impact of wealth shocks and unemployment during the Great Recession in the US. We find that many households experienced large capital losses in housing and in their financial portfolios, and...

We review different empirical approaches that researchers have taken to estimate how consumption responds to income changes. We critically evaluate the empirical evidence on the sensitivity of consumption to predicted income changes, distinguishing between the traditional excess sensitivity...

We review different empirical approaches that researchers have taken to estimate how consumption responds to income changes. We critically evaluate the empirical evidence on the sensitivity of consumption to predicted income changes, distinguishing between the traditional excess sensitivity...

In the early 1950s Modigliani, with Brumberg and Ando, formulated the life-cycletheory of consumption and savings that enjoyed a huge and undisputed success. But, since the early 1980s, the life-cycle theory has increasingly come under attack. One reason is the existence of an important...

In the early 1950s Modigliani, with Brumberg and Ando, formulated the life-cycletheory of consumption and savings that enjoyed a huge and undisputed success. But, since the early 1980s, the life-cycle theory has increasingly come under attack. One reason is the existence of an important...

In 2000 Italy replaced its traditional system of severance pay for public employees with a new system. Under the old regime, severance pay was proportional to the final salary before retirement; under the new regime it is proportional to lifetime earnings. This reform entails substantial losses...