consumption-saving behavior. We construct a novel consumption-saving model where the household must infer the persistent component … marginal propensity to consume because the short run covariance between income growth and consumption growth increases when … can be identified from panel data on income and consumption. Finally, we estimate a high degree of knowledge in the Panel …

ex-ante homeowners who rate (cash-out) refinance an existing loan to increase savings (consumption) are significantly …

loan to increase lifetime savings are significantly more likely to underestimate their house value, while homeowners who … "cash-out refinance" an existing loan to fund current consumption are significantly more likely to overestimate their house …

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 …

proposed. These expectation adjustments generate highly heterogenous consumption responses to income windfalls: many households … previous explanations for these effects, including consumption adjustment cost and liquidity constraints. At the aggregate … level, consumption is less sensitive to expansionary policies during recessions and its excess smoothness varies …

We study the cyclical dynamics of consumption in the euro area (EA) and the large EA countries by distinguishing … cross-country heterogeneity in how different factors (including durable-specific ones) explain consumption; (iii) the … strength of spillovers from durable to nondurable consumption, as predicted by theory, is empirically correlated with how much …

preference theory. It measures willingness-to- pay for others’ consumption and willingness-to-pay for equality in consumption by … evaluating consumption externalities in monetary terms. We introduce an al- truism parameter and an inequality aversion parameter …

Utilizing the asset pricing framework, we justify S-shaped consumption utility functions by reconciling realized … consumption with asset returns. The S-shaped consumption utility predicts a possible negative correlation between asset returns … and lower quantiles of consumption growth, for which we find evidence from micro-level data. This evidence refutes a …

Various deviations from the Permanent Income consumption model with rational expectations have been discussed in the … literature, including loss aversion and liquidity constraints. In the existing literature, these two types of consumption … asymmetry are usually considered as mutually exclusive. Using a single data set for US personal consumption, income and wealth …