This paper quantifies the extent of heterogeneity in consumption responses to changes in real interest rates and house … portfolios, observed in the Household Finance and Consumption Survey (HFCS) for these countries. We then show that the … heterogeneity in household finances implies that responses of consumption to changes in the real interest rate and in house prices …

-hyperbolic discounting. When agents recognize others' naivete, as strongly suggested by empirical evidence, they revise consumption paths …, as is typically assumed in the literature, they revise both consumption paths and price expectations (quasi … rate, long-run capital stock, and consumption level than quasi-perfect foresight. …

distributions of health and wealth, leading to differences in the ability to mitigate future income shocks. We study consumption … probability of low consumption, but increases wealth inequality and, in the medium run, the probability of low consumption. …