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...

What determines wealth inequality and mobility and how can the policy maker influence it? This paper quantifies in closed form the bottom and the top (Pareto) tail of the distribution in a continuous-time heterogeneous agent model. Financial market imperfections play a key role, for which...

This chapter is concerned with the distribution of personal wealth, which usually refers to the material assets that can be sold in the marketpace, although on occasion pension rights are also included. We summarise the available evidence on wealth distribution for a number of countries. This...

Using the Panel Study of Income Dynamics Survey, we reveal the non-linear dependence, between-squares correlation, between stock returns and earning risk exists. To understand how this non-linear dependence affects household life-cycle profile, we develop a life-cycle model that incorporates...

Private consumption, i.e., spending of households, is a key economic variable. While data on private consumption are widely available on a national, aggregate level, disaggregated data on household spending are scarce, particularly in the form of a panel. To fill this gap, we make use of Swiss...

We investigate the interplay between asset prices, wealth inequality, and taxation in a dynamic general equilibrium economy populated by multiple agents with heterogeneous risk aversions. Tax revenues are collected from consumption taxes and are equally redistributed to all investors through...

This paper quantitatively accounts for the cyclical dynamics of key macroeconomic housing and mortgage market variables using a tractable, search-theoretic model of housing with equilibrium mortgage default. To explain these dynamics, the model highlights the importance of liquidity spirals...

This paper documents the life-cycle patterns of household portfolios in Canada, and investigates several hypotheses about asset accumulation and allocation. Inferences are drawn from the 1999 Survey of Financial Security, with some comparisons to earlier wealth surveys from 1977 and 1984. I find...

Wealthier people generally hold a larger part of their savings in risky assets. Using the US Survey of Consumer Finances, I show that wealthier households also have a higher portfolio share of foreign assets. This relative home bias of the poor does not seem to be explained by fixed...

This paper documents the life-cycle patterns of household portfolios in Canada, and investigates several hypotheses about asset accumulation and allocation. Inferences are drawn from the 1999 Survey of Financial Security, with some comparisons to earlier wealth surveys from 1977 and 1984. I find...