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Perceived versus calibrated income risks in heterogeneous-agent consumption models

Wang, Tao - 2023 - Last updated: December 27, 2023

Models of microeconomic consumption (including those used in heterogeneous-agent macroeconomic models) typically calibrate the size of income risk to match panel data on household income dynamics. But, for several reasons, what is measured as risk from such data may not correspond to the risk...

Persistent link: https://www.econbiz.de/10014456727

Mortgage Debt, Hand-to-Mouth Households, and Monetary Policy Transmission

Agarwal, Sumit - 2020

-in-differences analysis shows that compared with homeowners without mortgage obligations, mortgagors increased their monthly credit card … spending by 7.2% after the 230bps mortgage rate reduction announced in September 2008. We find a significant spending response … after the mortgage rate reset. Subsequent to an interest-rate-increase episode, mortgagors symmetrically reduced their …

Persistent link: https://www.econbiz.de/10012850684

Quick-Fixing : Near-Rationality in Consumption and Savings Behavior

Andre, Peter; Flynn, Joel P.; Nikolakoudis, Georgios; … - National Bureau of Economic Research - 2025

When optimizing consumption-savings decisions is costly, people may instead rely on quick-fixes, simple policy functions that avoid these costs. We introduce a model of quick-fixing. To study it empirically, we field a novel survey that measures households' consumption policy functions in...

Persistent link: https://www.econbiz.de/10015326458

The Effects of Housing Adjustment Costs on Consumption Dynamics

Kay, Benjamin - 2016

Building on Flavin and Nakagawa (2008), this paper models household optimal consumption and portfolio selection when consumption services are generated by both non-durable consumption and by holding a durable good housing. Housing is illiquid in that a non-convex adjustment cost must be paid...

Persistent link: https://www.econbiz.de/10013007406

Inflation, Net Nominal Positions, and Consumption

Hackethal, Andreas; Schnorpfeil, Philip; Weber, Michael - 2022

We study redistributive effects of inflation across households with varying nominal wealth positions using a randomized information experiment on clients of a large bank. On average, individuals are well informed about current levels of inflation and are concerned about its impact on their...

Persistent link: https://www.econbiz.de/10014236128

How important is variability in consumer credit limits?

Fulford, Scott L. - 2014 - This version: May 2014; first draft: June 2010

Credit limit variability is a crucial aspect of the consumption, savings, and debt decisions of households in the United States. Using a large panel, this paper first demonstrates that individuals gain and lose access to credit frequently and often have their credit limits reduced unexpectedly....

Persistent link: https://www.econbiz.de/10010414215

Exponential-Growth Bias and Lifecycle Consumption

Levy, Matthew - 2015

Exponential-growth bias (EGB) is the tendency for individuals to partially neglect compounding of exponential growth. We develop a model wherein biased agents misperceive the intertemporal budget constraint, and derive conditions for overconsumption and dynamic inconsistency. We construct an...

Persistent link: https://www.econbiz.de/10013036519

Consumption and Voluntary Savings Response to Service Tax

Seal, Jayanta Kumar - 2020

In this paper, we estimate the effect of a tax policy change on households' consumption and retirement savings behavior, by using a unique panel data of voluntary retirement savings (PPF) and debit card spending transactions. On average, we find that households reduce their consumption by 14%...

Persistent link: https://www.econbiz.de/10012824255

Liquidity constraints and demand for maturity the case of mortgages

Ferrari, Alessandro; Loseto, Marco - 2023

Using administrative data on mortgages issued in Italy between 2018 and 2019, this paper estimates loan demand elasticities to maturity and interest rate. We find that households are responsive to both contract terms: a 1% decrease in interest rate increases the average loan size by 0.22%...

Persistent link: https://www.econbiz.de/10014478506

Inefficient Regulation : Mortgages versus Total Credit

Karapetyan, Artashes; Kvaerner, Jens Soerlie; Rohrer, … - 2021

mortgage rate. In the longer run, the supply of unregulated debt increases by almost 50 percent. We corroborate our findings by …

Persistent link: https://www.econbiz.de/10013225436