This paper focuses on the role of sweep programs in properly measuring money. We propose new monetary aggregates that adjust the conventional measures to account for the medium of exchange capability of funds in sweep programs. Using data on swept funds in retail and commercial demand deposit...

This paper utilizes a profit maximizing banking model to analyze sweeping behavior. Comparative statics results indicate that sweeping responds positively to increases in bank loan rates and reserve ratios and negatively to increases in the interest rate on reserves or to exogenous increases in...

This paper develops a comprehensive measure of household economic well-being. The "sustainable consumption" concept accounts for income, assets, debt, transfer payments, and asset returns to estimate a consumption path that balances resources with expenditure over a household's lifetime....

One might expect that rising US income inequality would reduce demand growth and create a drag on the economy because higher-income groups spend a smaller share of income. But during a quarter century of rising inequality, US growth and employment were reasonably strong, by historical standards,...

One might expect that rising US income inequality would reduce demand growth and create a drag on the economy because higher-income groups spend a smaller share of income. But during a quarter century of rising inequality, US growth and employment were reasonably strong, by historical standards,...

US household demand is well below its trend from prior to the Great Recession. We link weak demand to rising income inequality. The demand problem did not arise contemporaneously with higher income inequality because the bottom 95 percent of the income distribution went deeply into debt to...

We use consumption and balance sheet data disaggregated between the top 5% and the bottom 95% of US households by income to show that the bottom 95% went deeply into debt to mitigate the impact of their stagnant incomes on their consumption. We use micro data to calibrate an intrinsic Keynesian...

The value of a college degree is impacted by how it is financed. Using 1968-2011 PSID surveys we construct a synthetic panel of US high school and college graduates and derive a model of their respective incomes, accounting for taxes, unemployment, retirement and mortality. With CRRA utility,...

The Great Recession was deep and the subsequent recovery has been slower than most economists predicted. This article summarizes the message of a recent book that presents perspectives from a group of Keynesian economists who warned prior to 2007 of dangerous trends that could lead to these...