Both textbook economics and common sense teach us that the value of household wealth should be related to consumer … suggest. An important first step in understanding the consumption-wealth linkage is determining how closely the two variables … in consumption. This paper provides evidence that a surprisingly small fraction of the variation in household net worth …

wealth accumulation is to finance future consumption, either their own or that of heirs. The paper concludes that the … simplest model that explains the relevant facts is one in which either consumers regard the accumulation of wealth as an end in … itself, or unspent wealth yields a flow of services (such as power or social status) which have the same practical effect on …

Health and Retirement Study (HRS). In particular, we investigate the influence of aging and health shocks on a household … of a shock is greatly magnified when households have physical or mental impairments. This suggests that factors other …

We assess the degree of consumption smoothing implicit in a calibrated life-cycle version of the standard incomplete … the model have access to less consumption-smoothing against permanent earnings shocks than what is measured in the data …. BPP estimate that 36% of permanent shocks are insurable (i.e., do not translate into consumption growth), whereas the …

cycle and of the individual-level degree of consumption insurance against persistent earnings shocks. The richer earnings … individual-pre-tax and household-post-tax earnings and across administrative (Social Security Administration) and survey (Panel … Study of Income Dynamics) data. We estimate two alternative processes for household after-tax earnings and study their …

.Most families experienced a decline in wealth between 2007 and 2009, but many families saw only small changes on net, and others saw … substantial increases in their wealth. This pattern of gains and losses typically holds within demographic groups. Changes in … families' wealth over the period appear to reflect changes in asset values (particularly the value of homes, stocks, and …

an open question about how much the elasticity varies with wealth. We find a much lower consumption response for high … pass-through of income to consumption is explained, in a statistical sense, by differences in liquid wealth. Combining our …We estimate the elasticity of consumption with respect to income using an instrument based on firm-wide changes in pay …

proportionate revision in target wealth. We use panel data on the amount of wealth held for precautionary purposes available in the … permanent component of income, we find that households indeed revise approximately one-for-one their target wealth in response … permanent income is negatively correlated with the “wealth gap”, particularly for individuals whose wealth is substantially …

of consumption insurance against shocks to male and female wages, as estimated empirically by Blundell, Pistaferri and … predicts more consumption insurance, with pass-through rates of 29% and 16%. Most of the consumption insurance against …We show that a calibrated life-cycle two-earner household model with endogenous labor supply can rationalize the extent …

This paper studies the dynamics of portfolio rebalancing and consumption smoothing in the presence of non …-convex portfolio adjustment costs. The goal is to understand a household's response to income and return shocks. The model includes the … multiple assets, a household can buffer some income fluctuations through the asset without adjustment costs and engage in …