Recent empirical studies have found that consumption is more sensitive to current income than simple versions of the … life-cycle, permanent income hypothesis would predict. The present paper studies a model in which the fraction of consumers … exhibiting excess sensitivity is endogenously determined. The presence of income uncertainty and restrictions on borrowing are …

individual income data and assume that agents have to consume their endowment. I find that the model does not pass the Hansen and … Jagannathan test even for very volatile idiosyncratic income data. …

State-level consumption exhibits excess sensitivity to lagged income to the same extent as US aggregate data, but state …-specific (idiosyncratic) consumption exhibits substantially less sensitivity to lagged state-specific income---a result that also holds for … reaction of consumption to idiosyncratic disposable income shocks even if it fails at the aggregate US level. Further analysis …

investigate the empirical relation between three cointegrated variables: aggregate consumption, asset wealth, and labor income … the following structural question about the short-run dynamics: "How quickly does consumption adjust to changes in income … in income or wealth have been realized. We argue here, however, that a statistical methodology different from that used …

Current Population Survey, the Panel Study of Income Dynamics, the Consumer Expenditure Survey, and the Survey of Consumer … earnings, to disposable income, and, ultimately, to consumption and wealth. We document a continuous and sizable increase in … before 1982, but mitigate its increase thereafter. Taxes and transfers compress the level of income inequality, especially at …