Uninsurable income risk is often cited as an explanation for empirical deviations from the Lifecycle/Permanent-Income Hypothesis such as the hump-shaped lifecycle profile of mean consumption. In this paper, we solve a lifecycle consumption model using a calibrated income process that matches the...

We propose a novel approach to estimate household income uncertainty at various future horizons, and characterize how the estimated uncertainty evolves over the life cycle. We measure income uncertainty as the variance of linear forecast errors conditional on information available to households...

Using General William Sherman's 1864–65 military march through Georgia, South Carolina, and North Carolina during the American Civil War, this paper studies the effect of capital destruction on medium and long-run local economic activity, and the role of financial markets in the recovery...