This paper examines the effects of changes in uncertainty of household income on the macroeconomy. Households face …, where changes in precautionary savings due to time-varying uncertainty depress aggregate activity. With countercyclical … markups through sticky prices, increased precautionary savings lower aggregate demand and generate significant output losses …

households. Using data from the Bank of Italy's Survey on Household Income and Wealth covering the financial crisis, we are able … both 2008-2010 and 2010-2012 spells. The most important smoothing mechanisms turn out to be self‐insurance through savings … separately. We find that Italian households were able to smooth on average about 85% of shocks to household head's earnings in …

This paper aims to test the microfoundations of consumption models and quantify the macro implications of heterogeneity … in consumption behavior. We propose a new empirical method to estimate the sensitivity of consumption to permanent and … large sample size, along with detailed household balance sheet information, allows us to finely divide the population along …

We measure the extent of consumption insurance to income shocks accounting for high-order moments of the income … distribution. We derive a nonlinear consumption function, in which the extent of insurance varies with the sign and magnitude of … negative shock transmits to consumption compared to 9% of an equal-sized positive shock – and the pass-through increases as the …

to a significant overestimation of consumption insurance and even more so at the bottom of the wealth distribution. … consumption insurance. Based on insights from a theoretical model, we propose a new test to detect advance information, which … requires only panel data on consumption and income. Using the Panel Study of Income Dynamics, we find-in contrast to the …

We examine the household consumption response to fluctuations in income and uncertainty, exploiting a large panel …, both household-specific income uncertainty and local labor market uncertainty depress consumption spending. We also find … evidence of heterogeneity in consumption behavior, most notably an inverted U-shape response to income fluctuation and a …

that a decrease of say unemployment probability or an increase in unemployment insurance (UI) generosity affects saving not … savings while a decreased variation in earnings decrease saving. Not accounting for the effect on expected earnings on saving …

Recessions and expansions are often caused or reinforced by developments in private consumption - the largest component … cyclical component of consumption and an understanding of its drivers is essential. We estimate US cyclical consumption using a … cyclical consumption variable to that of univariate measures such as the recently introduced cc variable by Atanasov et al …

transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX … repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life … evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in …

household savings rate and the U-shaped age-profile of savings …China's household saving rate has increased markedly since the mid-1990s and the age-saving profile has become U … permanent variance of household income was stable, the transitory variance rose sharply. Based on these estimates, we calibrate …