We study the cyclical dynamics of consumption in the euro area (EA) and the large EA countries by distinguishing … cross-country heterogeneity in how different factors (including durable-specific ones) explain consumption; (iii) the … strength of spillovers from durable to nondurable consumption, as predicted by theory, is empirically correlated with how much …

proposed. These expectation adjustments generate highly heterogenous consumption responses to income windfalls: many households … previous explanations for these effects, including consumption adjustment cost and liquidity constraints. At the aggregate … level, consumption is less sensitive to expansionary policies during recessions and its excess smoothness varies …

with a bequest motive, health-dependent utility, and uncertain longevity and health. We allow the parameters of the bequest …

, experimentally elicited loss aversion and precautionary savings. We do so using a sample of 640 individuals from the low … theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals …, and that this increase in savings grows with the degree of loss aversion. Thus, as suggested by Koszegi and Rabin (2009 …

Various deviations from the Permanent Income consumption model with rational expectations have been discussed in the … literature, including loss aversion and liquidity constraints. In the existing literature, these two types of consumption … asymmetry are usually considered as mutually exclusive. Using a single data set for US personal consumption, income and wealth …

the consumption level of all households who are perceived to be richer, on household savings and consumption. When … data from the German Socio-Economic Panel, we estimate the causal effect of changes in reference consumption, defined as … controlling for own income, an increase in reference consumption of 100 euros leads to an increase in consumption of 10 to 25 …

flexibly adjusting savings to income variations as assumed by the Permanent Income Hypothesis (PIH). Fixed amount saving … behaviour could thus imply a challenge to PIH-based standard models of consumption if it meant that a substantial share of … consumption to predictable income changes observed in Germany. -- Fixed Amounts Saving ; Permanent Income Hypothesis ; Consumption …

liquidity buffer needed by the average low-income household. First, we document diminishing benefits to liquid savings in terms … roughly 1 month of income for the average low-income household – which is far less than the savings amounts implied by common …

, experimentally elicited loss aversion and precautionary savings. We do so using a sample of 640 individuals from the low … theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals …, and that this increase in savings grows with the degree of loss aversion. Thus, as suggested by Koszegi and Rabin (2009 …