Macroeconomic models often invoke consumption "habits" to explain the substantial persistence of macroeconomic … consumption growth. But a large literature has found no evidence of habits in the microeconomic datasets that measure the behavior … of individual households. We show that the apparent conflict can be explained by a model in which consumers have accurate …

stock' model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model … uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the … saving rate's long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business …

consumer spending to its pre-crisis levels. If the lockdown lasts longer, an extension of enhanced unemployment benefits will …To predict the effects of the 2020 U.S. ‘CARES' act on consumption, we extend a model that matches responses of … households to past consumption stimulus packages. The extension allows us to account for two novel features of the coronavirus …

We estimate the degree of 'stickiness' in aggregate consumption growth (sometimes interpreted as reflecting consumption … degree of autocorrelation, with a stickiness parameter of about 0.7 on average across countries. The sticky …-consumption-growth model outperforms the random walk model of Hall (1978), and typically fits the data better than the popular Campbell and …

consumer spending to its pre-crisis levels. If the lockdown lasts longer, an extension of enhanced unemployment benefits will …To predict the effects of the 2020 U.S. "CARES" act on consumption, we extend a model that matches responses of … households to past consumption stimulus packages. The extension allows us to account for two novel features of the coronavirus …

stock' model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model … uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the … saving rate's long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business …

Macroeconomic models often invoke consumption "habits" to explain the substantial persistence of macroeconomic … consumption growth. But a large literature has found no evidence of habits in the microeconomic datasets that measure the behavior … of individual households. We show that the apparent conflict can be explained by a model in which consumers have accurate …

permanent income shocks helps our model to explain a substantial part of the large degree of empirical wealth heterogeneity that …A large body of microeconomic evidence supports Friedman (1957)'s proposition that household income can be reasonably … well described as having both transitory and permanent components. We show how to modify the widely-used macroeconomic …

, we first document the substantial cross-country variation in how various measures of wealth are distributed across … individual households. Through the lens of a standard, realistically calibrated model of buffer-stock saving with transitory and … affect the marginal propensity to consume out of transitory shocks (MPC). We find that the aggregate consumption response …

dynamics. When the model is modified in a way that permits it to match empirical measures of wealth inequality in the U.S., we … show that its predictions (unlike those of competing models) are consistent with the substantial body of microeconomic … how the shock is distributed across categories of households (e.g., low-wealth versus high-wealth households). …