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Household debt, liquidity constraints and the interest rate elasticity of private consumption

Kärkkäinen, Samu; Silvo, Aino - 2023

We study whether the level of household indebtedness is related to the interest rate elasticity of private consumption … even as the household sector's debt-to-income ratio has almost doubled in the past 20 years. Estimates based on the … household-level Finnish Wealth Survey suggest that the share of liquidity-constrained households has declined over the same time …

Persistent link: https://www.econbiz.de/10014265629

Predictable Life-Cycle Shocks, Income Risk and Consumption Inequality

Primiceri, Giorgio E. - 2006

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX repeated cross-section data on consumption and income to...

Persistent link: https://www.econbiz.de/10012733915

Social security in an analytically tractable overlapping generations model with aggregate and idiosyncratic risk

Harenberg, Daniel; Ludwig, Alexander - 2014 - This Version: September 22, 2014

When markets are incomplete, social security can partially insure against idiosyncratic and aggregate risks. We incorporate both risks into an analytically tractable model with two overlapping generations and demonstrate that they interact over the life-cycle. The interactions appear even though...

Persistent link: https://www.econbiz.de/10010419846

Social Security in an Analytically Tractable Overlapping Generations Model with Aggregate and Idiosyncratic Risk

Harenberg, Daniel - 2014

Persistent link: https://www.econbiz.de/10013045314

Social Security in an Analytically Tractable Overlapping Generations Model with Aggregate and Idiosyncratic Risk

Harenberg, Daniel - 2014

Persistent link: https://www.econbiz.de/10013046775

Social security in an analytically tractable overlapping generations model with aggregate and idiosyncratic risk

Harenberg, Daniel; Ludwig, Alexander - 2015 - This Version: April 13, 2015

in closed form and show that joint presence of both risks leads to over-proportional risk exposure for households. This …

Persistent link: https://www.econbiz.de/10012061588

Dissecting saving dynamics : measuring wealth, precautionary, and credit effects

Carroll, Chris; Slacalek, Jirka; Sommer, Martin - 2012

We argue that the U.S. personal saving rate's long stability (1960s-1980s), subsequent steady decline (1980s-2007), and recent substantial rise (2008-2011) can be interpreted using a parsimonious 'buffer stock' model of consumption in the presence of labor income uncertainty and credit...

Persistent link: https://www.econbiz.de/10009618873

Dissecting saving dynamics : measuring wealth, precautionary, and credit effects

Carroll, Chris; Slacalek, Jirka; Sommer, Martin - 2012

We argue that the US personal saving rate's long stability (1960s-1980s), subsequent steady decline (1980s-2007), and recent substantial rise (2008-2011) can be interpreted using a parsimonious "buffer stock" model of consumption in the presence of labor income uncertainty and credit...

Persistent link: https://www.econbiz.de/10009622465

Incomplete-market equilibria solved recursively on an event tree

Dumas, Bernard; Lyasoff, Andrew - 2008

We develop a method that allows one to compute incomplete-market equilibria routinely for Markovian equilibria (when they exist). The main difficulty to be overcome arises from the set of state variables. There are, of course, exogenous state variables driving the economy but, in an incomplete...

Persistent link: https://www.econbiz.de/10003966639

Optimal consumption and investment with Epstein-Zin recursive utility

Kraft, Holger; Seiferling, Thomas; Seifried, Frank Thomas - 2016 - This version: May 31, 2016

We study continuous-time optimal consumption and investment with Epstein-Zin recursive preferences in incomplete markets. We develop a novel approach that rigorously constructs the solution of the associated Hamilton-Jacobi-Bellman equation by a fixed point argument and makes it possible to...

Persistent link: https://www.econbiz.de/10012061099