This is an entry for The New Palgrave Dictionary of Economics, 2nd Ed.

Economists working with numerical solutions to the optimal consumption/saving problem under uncertainty have long known that there are quantitatively important interactions between liquidity constraints and precautionary saving behavior This paper provides the analytical basis for those...

This paper investigates whether the Japanese voters became happy and/or unhappy due to the results of the General Election in 2009. We conducted a daily web survey for seven days before and after the election, obtaining1068 responses. Estimating a fixed effects model, we found that supporters of...

This paper investigates whether Japanese people were happy and unhappy with the general election conducted on September 11, 2005, in which the Prime Minister, Koizumi, won a landslide victory. We conducted a large survey just after the election to ask people how happy they were and which party...

To predict the effects of the 2020 U.S. "CARES" act on consumption, we extend a model that matches responses of households to past consumption stimulus packages. The extension allows us to account for two novel features of the coronavirus crisis. First, during the lockdown, many types of...

We argue that the U.S. personal saving rate's long stability (from the 1960s through the early 1980s), subsequent steady decline (1980s-2007), and recent substantial increase (2008-2011) can all be interpreted using a parsimonious `buffer stock' model of optimal consumption in the presence of...

In a model calibrated to match micro- and macroeconomic evidence on household income dynamics, we show that a modest degree of heterogeneity in household preferences or beliefs is sufficient to match empirical measures of wealth inequality in the United States. The heterogeneity-augmented...

We argue that the U.S. personal saving rate's long stability (1960s-1980s), subsequent steady decline (1980s-2007), and recent substantial rise (2008-2011) can be interpreted using a parsimonious 'buffer stock' model of consumption in the presence of labor income uncertainty and credit...

We analyze monetary policy in a New Keynesian model with durable and non-durable goods each with a separate degree of price rigidity. The model behavior is governed by two New Keynesian Phillips Curves. If durable goods are sufficiently long-lived we obtain an intriguing variant of the...