-effect interpretation, the effect is stronger for higher-income workers. In the negative-return domain, interestingly, a decline in stock … investment returns is followed by lower output, especially for male, younger, less educated, and lower-income workers. Overall …

We study the impact of income disaster-which can be triggered by various reasons such as pandemics and technological … disruption-on Friedman's permanent income hypothesis. Although the hypothesis is still retained, our general equilibrium model … offers two insights. First, with income disaster the equilibrium interest rate can be a decreasing function of the risk …