We use sizeable lottery prizes in Norwegian administrative panel data to characterize households' marginal propensities to consume (MPCs). Our main contribution is to document how MPCs vary with household characteristics and prize size, and how lottery prizes are spent and saved over time. We...

We introduce permanently-shifting income shares into a standard growth model with two types of agents. Capital owners represent the top quintile of U.S. households while workers represent the remainder. Our tractable model allows us to exactly replicate the observed U.S. time paths of the top...

This paper extends the real business cycle model with fiscal policy to allow for endogenous government expenditures and taxes. Fiscal policy in the model is determined by a government that seeks to maximize the welfare of a representative household under the assumption of commitment. On the...