This paper describes the transmission of income inequality into consumption inequality and in so doing investigates the … degree of insurance to income shocks. It combines panel data on income from the PSID with consumption data from repeated CEX … found to play an important role in insuring permanent shocks. Adding durable expenditures to the consumption measure …

Recent theoretical contributions have suggested consumption externalities, or peergroup effects, as a potential … intertemporal consumption choice is a completely open question. To shed some light on the issue, we derive an extension of the … standard life-cycle model that allows for consumption externalities. The analysis is complicated by the challenge of …

This paper uses panel data on household consumption and income to evaluate the degree of insurance to income shocks …. Our aim is to describe the transmission of income inequality into consumption inequality. Our framework nests the special …-sectional distribution of consumption growth, and analyzing the way these two measures of household welfare correlate over time. We combine …

The budget constraint requires that, eventually, consumption must adjust fully to any permanent shock to income …

simulate a generalization of the buffer-stock consumption model with longterm revolving debt contracts. In line with US credit …

In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that … incorporates household consumption and family labour supply decisions. We derive analytical expressions based on approximations for … the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non …

information on consumption, income and wealth, to structurally estimate a buffer-stock saving model. We exploit the information … contained in the joint dynamics of income, consumption and wealth to quantify the degree of insurance against income risk. The …