Evaluating a new survey dataset of German consumers, we test whether individual consumption plans are formed according to an Euler equation derived from consumption life-cycle models. Estimating several consumption Euler equations, the results are mostly in line with the theory: We find evidence...

We address the issue of estimating the Euler equation for emerging markets. Using panel data for Russian households, we show that accounting for consumer type and income level is crucial. Consumers, who have neither savings nor loans, as well as consumers with low income, face liquidity...

We study optimal time-consistent distortionary taxation when the repayment of government debt is not enforceable. The government taxes labor income or issues noncontingent debt in order to finance an exogenous stream of stochastic government expenditures. The government can repudiate its debt...