We use responses to survey questions in the 2010 Italian Survey of Household Income and Wealth that ask consumers how much of an unexpected transitory income change they would consume. We find that the marginal propensity to consume (MPC) is 48 percent on average, and that there is substantial...

In this study, the relation between consumer credit and real economic activity during the Great Moderation is studied in a dynamic stochastic general equilibrium model. Our model economy is populated by two different household types. Investors, who hold the economy’s capital stock, own the...

We study the impact a redistribution of income has on the decisions of a health care innovator and the utility of consumers. We find that income redistribution from rich to poor increases the quality of the medical innovation, reduces its price and increases the utility of some of the consumers...