We evaluate the impact of increased income uncertainty and financial liberalization in the US on consumption volatility and household welfare. We estimate Euler equations and measure the volatility of unpredictable changes in consumption as the squared Euler equation residuals. We directly...

Equilibrium assumptions posit relations between different people's beliefs and behavior without describing a process that causes these relations to hold. I show that because equilibrium models do not describe a causal process whereby one endogenous variable affects another, attempts to decompose...

Wealth in the United States rose and fell precipitously during the first decade of this century for all major ethnic groups, but the fluctuations in Hispanic wealth were especially extreme. We show that household characteristics and location can account for the Hispanic experience during the...