The speed of both the rise and fall of US inflation in 2021–23 took many economists by surprise. This paper shows that the rise of COVID era inflation reflects three independent shocks: a plethora of pandemic-related shifts in demand patterns and supply disruptions; the largest commodity price...

COVID era inflation was driven by a unique combination of three shocks: First, a plethora of pandemic-related shifts in demand patterns and disruptions to supply caused prices of consumer durable goods to skyrocket. Second, the Ukraine war caused the largest global commodity price surge in 40...

Governments worldwide have set targets to reduce greenhouse gas emissions from the residential sector to zero. Policy instruments, such as carbon pricing or subsidies, are being discussed and implemented to achieve these targets. If individuals exhibit present bias, Heutel (2015) has shown that...

Governments worldwide have set targets to reduce greenhouse gas emissions from the residential sector to zero or close to zero. Policy instruments, such as carbon pricing or subsidies, are being discussed and implemented to achieve these targets. If individuals exhibit present bias, Heutel (...

Regulation (EU) 2024/1257 on type-approval of motor vehicles and engines and of systems, components and separate technical units intended for such vehicles, with respect to their emissions and battery durability, also called Euro 7, will be applicable by the end of May 2028 for new heavy-duty...

Measuring the physical durability of garments is difficult and current assessment methods lack objectivity and reliability or don't reflect the complex nature of durability for different garment categories. This study presents a novel and reproducible methodology for testing and ranking the...

As part of the green transition, the European cap-and-trade scheme for CO2 emissions will be extended to cover consumer durables. We propose a New Keynesian model that features both, "brown" and "green" durable goods and show that if monetary policy follows a business-as-usual approach, the...

This paper examines how homeownership status shapes attention to inflation and its impact on durable consumption. Using randomized controlled trials on U.S. households (2021-2023), we document systematic heterogeneity in responses to inflation-related information. Homeowners exhibit greater...

We exploit Germany's temporary three-percentage-point VAT cut in the second half of 2020 to study the spending response to unconventional fiscal policy. We use survey and scanner data on household consumption expenditures and their perceived pass-through of the tax change into prices, and a RANK...

In this paper, we examine how different household consumption items respond to monetary policy shocks in the euro area. Specifically, we classify household consumption along two key dimensions: durability and essentiality. Our findings reveal pronounced heterogeneity in responses across these...

Textile disposal is often determined less by physical deterioration than by shifting consumer preferences and socio-cultural norms-what is known as "extrinsic durability". What factors influence consumer practices which, in turn, increase or reduce how much they 'make use' of their clothes -...

We exploit the spatial and temporal variation of the staggered introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables. Using the American Housing Survey from 1981 to 1989, we link the timing of these...

We use novel transaction-level card expenditure data to estimate the effect of the temporary value-added tax (VAT) cut in Germany 2020. We find that the annualized growth rate of expenditures for durables increased by 6 percentage points (pp) during the tax cut, with a particularly strong...

We use novel transaction-level card expenditure data to estimate the effect of the temporary value-added tax (VAT) cut in Germany 2020. We find that the annualized growth rate of expenditures for durables increased by 6 percentage points (pp) during the tax cut, with a particularly strong...

We use novel transaction-level card expenditure data to estimate the effect of the temporary value-added tax (VAT) cut in Germany 2020. We find that the annualized growth rate of expenditures for durables increased by 6 percentage points (pp) during the tax cut, with a particularly strong...

A buyer wishes to purchase a durable good from a seller who in each period chooses a mechanism under limited commitment. The buyer's value is binary and fully persistent. We show that posted prices implement all equilibrium outcomes of an infinite-horizon, mechanism-selection game. Despite being...

We investigate the existence of a principal-agent problem between parents and financially dependent adult children within households on the purchase of a durable (such as a vehicle). We theoretically argue that children will select more expensive durables if parents contribute more towards its...

The focus of this Element is on the idea that choice is hierarchical so that there exists an order of acquisition of durable goods and assets as real incomes increase. Two main approaches to deriving such an order are presented, the so-called Paroush approach and Item Response Theory. An...

This article captures the effects of secondary markets on the durable goods with game theory technology. Firstly, under monopoly in production, secondary markets both improve the producer's profits and extend the market size. Secondly, to improve the profits, the producer launches the secondary...

Governments worldwide have set targets to reduce greenhouse gas emissions from the residential sector to zero. Policy instruments, such as carbon pricing or subsidies, are being discussed and implemented to achieve these targets. If individuals exhibit present bias, Heutel (2015) has shown that...

Leaking water infrastructures, heritage tourism, investments in artworks, failing electronics: Durability lies at the heart of a wide range of seemingly unrelated phenomena. In today's economies, which rest on ever-larger stocks of infrastructures, buildings, machinery and household goods,...

This study shows that, in a model with non-separable preferences for durable and non-durable goods, the effect of relative prices on the ratio of consumption for the two goods, known as the intratemporal elasticity of substitution, has decreased in the U.S. since 1981. We found that durable and...

A consumption-based, long-run risk equilibrium model with nondurable and durable goods is estimated using US nominal interest rate data. The model generates upward-sloping nominal yield curves and nearly flat real yield curves, implying that the term structure of inflation risk premia is...

Durable goods attenuate the power of forward guidance. The extensive and intensive margins of durable goods demand are both more sensitive to the contemporaneous user cost than to future user costs. Changes in the contemporaneous real interest rate directly affect the contemporaneous user cost...

This paper explores the implications of consumption heterogeneity between domestic and foreign investors on the cross-section of stock returns in a host country. We argue that foreign investors in a small open economy integrated into global financial markets may face consumption risk, which...

Durables goods can be used for consumption services, but also as equipment for production. The literature has documents that durable good producers have higher expected returns, while investment good producers lower risk premiums. I resolve this seemingly conflicting evidence by suggesting that...