The goal of this paper is to show that household-level financial distress (FD) varies greatly, meaning there is unequal exposure to macroeconomic risk, and that FD can increase macroeconomic vulnerability. To do this, we first establish three facts: (i) regions in the U.S. vary significantly in...

"Whether technological progress raises or lowers aggregate employment in the short run has been the subject of much debate in recent years. Using a simple model of industry employment, we show that cross-industry differences of inventory holding costs, demand elasticities, and price rigidities...

This article presents two simple calculations aimed at providing a first step in quantifying the costs of unanticipated financial shocks to a household. The two types of shocks considered are (1) an unanticipated drop in net worth and (2) an unexpected increase in the interest rate on borrowing....