Financial markets provide imperfect insurance of labor income risk. However, workers can partly insure against labor … market risk by commuting to adjacent regions. Since commuters own wage claims to output produced in adjacent regions, the … business cycle in the neighborhood becomes a relevant risk factor at the regional level. In our empirical analysis for US …

the US over the period 1952-2001. Theoretically, the effect of income risk on consumption changes is decomposed into an … aggregate and into a consumer-specific part. Empirically, aggregate risk is modelled through a GARCH process on aggregate income … that aggregate income risk explains a negligible fraction of the variance of aggregate consumption changes. A more …

aggregate risk sharing are more pronounced in states in which small firms account for a large share income or employment. In … downturns. -- Interstate risk sharing ; regional business cycle ; proprietary income ; small businesses ; state banking …Consumption risk sharing among U.S. federal states increases in booms and decreases in recessions. We find that small …

This paper tests the prediction of the Permanent Income Hypothesis (PIH) that news about future income induce a … revision in consumption equal to the revision in permanent income. We use time-series data from 48 contiguous US states to …

State-level consumption exhibits excess sensitivity to lagged income to the same extent as US aggregate data, but state …-specific (idiosyncratic) consumption exhibits substantially less sensitivity to lagged state-specific income - a result that also holds for … reaction of consumption to idiosyncratic disposable income shocks even if it fails at the aggregate US level. Further analysis …

the US over the period 1952-2001. Theoretically, the effect of income risk on consumption changes is decomposed into an … aggregate and into a consumer-specific part. Empirically, aggregate risk is modelled through a GARCH process on aggregate income … that aggregate income risk explains a negligible fraction of the variance of aggregate consumption changes. A more …

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of … repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life … evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in …