period has been the theory of upward-looking consumption externalities leading to expenditure cascades. We propose a … parsimonious model of upward-looking consumption at the micro level mediated by perception networks with empirically plausible … knowledge, our approach is the first to make the reference group to which conspicuous consumption relates explicit. Our model …

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 …