Preferences over wealth can explain why households do not spend more when real interest rates fall, because they save … more than optimal under a standard model. However, little is known about preferences over wealth empirically. We run an … wealth, consistent with wealth entering the utility function directly. …

During the period from 1990 to 2002, U.S. households experienced a dramatic wealth cycle, induced by a 369-percent … rise throughout this period. Using data from 1990 to 2005, traditional approaches to estimating macroeconomic wealth …, income, and wealth is weak at best; and (ii) life-cycle models that rely on aggregate measures of wealth cannot explain why …

The effect of wealth on consumption is an issue of longstanding interest to economists. Analysts believe that … fluctuations in household wealth have driven major swings in economic activity. This paper considers so-called wealth effects - the … impact of changes in wealth on household consumption and the overall macroeconomy. There is an extensive existing literature …