We find that competition from payday lenders leads depository institutions to raise overdraft fees and reduce the availability of “free” checking accounts. We attribute this rise in prices partly to adverse selection created by banks’ practice of charging a flat fee regardless of the...

Higher sales tax in the home country relative to a neighboring country creates a huge incentive for consumers who live closer to the border to purchase goods across the border. Using a unique panel dataset of consumer financial transactions, we find that, when facing higher domestic sales tax,...

Banks impose a variety of account fees, and credit card issuers impose a variety of fees related to card usage. Using detailed data from a 2021 representative diary survey of US consumers, we investigate whether lower-income consumers and Black consumers are more likely to pay bank account or...

I propose a flexible non-parametric method using Recurrent Neural Networks (RNN) to estimate a generalized model of expectation formation. This approach does not rely on restrictive assumptions of functional forms and parametric methods yet nests the standard approaches of empirical studies on...

I explain the credit card debt puzzle – the co-holding of high-cost debt and low-yield liquid assets – with a household and individual determinant that lower debt repayments. At the household level, co-holding is consistent with intra-household frictions. Couples co-hold 40 percent more than...

Expectations about different macroeconomic aspects correlate with each other. I perform a structural test in the framework of the noisy information model and show that individual forms their expectations on multiple macroeconomic variables jointly rather than independently, thus causing these...

We study the tradeoff between direct and indirect stock investments through equity mutual funds for a utility-maximizing investor. Whereas direct investments impose higher transaction costs on the formation of a well-diversified portfolio, mutual funds charge fees for their services. Our results...

While in the data wealth is concentrated in the hands of a small number of rich people and the saving rate of the rich is high, many models used for quantitative policy evaluation fail to match these facts. In addition, some of the models that succeed in matching these facts have radically...

The so-called retirement-savings puzzle is a phenomenon by which, contrary to what the basic life-cycle model predicts, households do not run down their wealth significantly during retirement. In this survey paper we briefly review the literature that attempts to solve the retirement-savings...

With-profit life insurance contracts are designed with a return smoothing collective savings component sharing the investment risks amongst different generations of policyholders. We analyze the resulting implications from the point of view of a multi-asset mean-variance investor by evaluating...