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extant research on consumption insurance find that people face substantial risks that they do not fairly pool. In theory, the … changes in risk to fluctuations in aggregate consumption and (d) the significant impact of incomplete markets on aggregate …
Persistent link: https://www.econbiz.de/10005504693
expenditure. We find support for these predictions in three field experiments that randomly assign reminders to new savings …
Persistent link: https://www.econbiz.de/10008550318
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/10005661588
This paper proposes a new approach for modeling investor fear after rare disasters. The key element is to take into account that investors' information about fundamentals driving rare downward jumps in the dividend process is not perfect. Bayesian learning implies that beliefs about the...
Persistent link: https://www.econbiz.de/10009201120
withdrawal of employers and external insurers as risk bearers of systematic financial and longevity risks. Partly because of … pension: the Personal Pension with Risk sharing (PPR). By unbundling and valuing the investment, (dis)saving, insurance and … risk-sharing functions of pensions, PPRs allow risk management and (dis)saving to be customized to the specific features of …
Persistent link: https://www.econbiz.de/10011252616
risk aversion, we find that consumer behaviour changes strikingly over the life-cycle. Young consumers behave as buffer …
Persistent link: https://www.econbiz.de/10005504201
representative agent’s coefficient of relative risk aversion to vary with the underlying economy’s growth rate. Existence of … risk aversion, the equilibrium risk free and risky security returns are demonstrated to have volatilities and an associated …
Persistent link: https://www.econbiz.de/10005497824
This Paper analyses dynamic equilibrium risk sharing contracts between profit-maximizing intermediaries and a large … the agent with an intermediary. We then show that our contract economy is equivalent to a consumption-savings economy with … not sustainable, even though a risk allocation superior to autarky can be achieved. …
Persistent link: https://www.econbiz.de/10005498096
Government spending at the zero lower bound (ZLB) is not necessarily welfare enhancing, even when its output multiplier is large. When government spending provides direct utility to the household, its optimal level is at most 0.5-1 percent of GDP for recessions of -4 percent; the numbers are...
Persistent link: https://www.econbiz.de/10011083323
Almost half of American families did not adjust their consumption following receipt of the 2001 or 2008 tax rebates. Another 20%, with low income and more likely to rent, spent a small but significant amount. Households with large spending propensity held high mortgage debt. The heterogeneity is...
Persistent link: https://www.econbiz.de/10011083341