We revisit the transmission mechanism of monetary policy for household consumption in a Heterogeneous Agent New … intertemporal substitution drives virtually all of the transmission from interest rates to consumption. …

distinguishing between consumption theories. Asking households about their intended spending under various scenarios, we find that 1 …

"We assess the degree of consumption smoothing implicit in a calibrated life-cycle version of the standard incomplete … the model have access to less consumption-smoothing against permanent earnings shocks than what is measured in the data …. BPP estimate that 36% of permanent shocks are insurable (i.e., do not translate into consumption growth), whereas the …

We assess the degree of consumption smoothing implicit in a calibrated life-cycle version of the standard incomplete … the model have access to less consumption-smoothing against permanent earnings shocks than what is measured in the data …. BPP estimate that 36% of permanent shocks are insurable (i.e., do not translate into consumption growth), whereas the …