One of the perennial questions in the switching cost literature is whether switching costs enhance or harm firms' profits. In this paper, we ask what types of switching costs, among those that are commonly observed, enhance firm's profits provided that firms can i) endogenously influence the...

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...