risk and (ii) MPC heterogeneity. I find that MPC heterogeneity is the dominant channel because a large fraction of …

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 …