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  • Richard Blundell, Luigi Pistaferri, Itay Saporta-Eksten, Blundell, We, Mark Aguiar +5 others
  • 2012
In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that incorporates household consumption and family labor supply decisions. We derive analytical expressions based on approximations for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks,(More)
  • Karen Dynan, Douglas Elmendorf, Daniel Sichel, Alan Auerbach, Chris Carroll, Molly Dahl +15 others
  • 2010
Using a representative longitudinal survey of U.S. households, we find that household income became noticeably more volatile between the early 1970s and the late 2000s despite the moderation seen in aggregate economic activity during this period. We estimate that the standard deviation of percent changes in household income rose about 30 percent between(More)
The textbook neoclassical growth model predicts that countries with faster productivity growth should invest more and attract more foreign capital. We show that the allocation of capital flows across developing countries is the opposite of this prediction: capital does not flow more to countries that invest and grow more. We call this puzzle the "(More)
Using state-level variation over time in the top deciles of the income distribution, we observe that non-rich households consume a larger share of their current income when exposed to higher top income levels. We argue that permanent income, wealth effects, or upward local price pressures cannot be the sole explanation for this finding. Instead, we show(More)
  • Jonathan A Parker, Christian Broda, Chris Carroll, John Heaton, Nicholas Souleles, Jeremy Tobacman +4 others
  • 2015
This paper evaluates theoretical explanations for the propensity of households to increase spending in response to the arrival of predictable, lump-sum payments, using households in the Nielsen Consumer Panel who received $25 million in Federal stimulus payments that were distributed randomly across weeks. The pattern of spending is inconsistent with models(More)
We employ a new, large, and confidential panel of US income tax returns for the period 1987-2009 to extensively characterize and quantify business income risks and to compare to labor income or earnings risks. Our findings show business income to be much riskier than labor income, even conditional on a household's continued participation in private business(More)
  • Hui Chen, Michael Michaux, Usc Marshall, Nikolai Roussanov Wharton, Nber, Andy Abel +16 others
  • 2011
Mortgage refinancing waves tend to coincide with economic downturns. Using both aggregate and state-level data we show that refinancing activity increases when economic conditions deteriorate, even after controlling for the cyclical behavior of interest rates, with a larger fraction of loans involving cash-out (equity extraction) around recessions. We(More)
The aftermath of the recent recession has seen numerous calls to use transfers to poorer households as a means to enhance aggregate activity. The goal of this paper is to study the effects of wealth redistribution from rich to poor households on consumption and output in the short run. We show that in a standard incomplete-markets model extended to allow(More)
  • Jason Debacker, Bradley Heim, Vasia Panousi, Shanthi Ramnath, Ivan Vidangos, Marios Angeletos +13 others
  • 2012
Our paper represents the first attempt in the literature to estimate the properties of business income risk from privately held businesses in the US. Using a new, large, and confidential panel of US income tax returns for the period 1987-2009, we extensively document the empirical stylized facts about the evolution of various business income risk measures(More)
This paper considers the role that information heterogeneity can play in generating wealth inequality. We solve a model where households face both aggregate and idiosyncratic shocks to returns and wages under two assumptions about information – fully-informed (FI) economies have agents who observe all states while partially-informed (PI) economies have(More)