We quantify the amount of cross-sectional income and consumption smoothing achieved within subgroups of states, such as regions or clubs, e.g. the club of rich states. We find that there is much income smoothing between as well as within regions. By contrast, consumption smoothing occurs mainly...

This paper uses ML and GMM techniques to estimate systems of stochastic differential equations that describe the behavior of stock returns. We test restrictions implied by a continuous time asset pricing model that builds on the work of Chamberlain (1998). The stochastic differential equations...

We estimate the amount of income and consumption smoothing (risk sharing) between countries in the European Monetary Union (EMU) and between other developed countries during the period 1970–2003. In particular, we examine if EMU countries display different patterns of risk sharing than other...

We estimate the effects of deregulation of U.S. banking restrictions on interstate personal income insurance for the period 1970 to 2001. Interstate income insurance occurs when personal income reacts less than one-to-one to state-specific output shocks. We find that insurance improved after...

Homeowners in the Panel Study of Income Dynamics are able to maintain a high level of consumption following job loss (or disability) in periods of rising local house prices while the consumption drop for homeowners who lose their job in times of lower house prices is substantial. These results...

We estimate the effects of deregulation of U.S. banking restrictions on the amount of interstate personal income insurance during the period 1970–2001. Interstate income insurance occurs when personal income reacts less than one-to-one to state-specific shocks to output. We find that income...

Homeowners in the Panel Study of Income Dynamics are able to maintain a high level of consumption following job loss (or disability) in periods of rising local house prices while the consumption drop for homeowners who lose their job in times of lower house prices is substantial. These results...

This paper considers estimation based on a set of <italic>T</italic> + 1 discrete observations, <italic>y</italic>(0), <italic>y</italic>(<italic>h</italic>), <italic>y</italic>(2<italic>h</italic>),…, <italic>y</italic>(<italic>Th</italic>) = <italic>y</italic>(<italic>N</italic>), where <italic>h</italic> is the sampling frequency and <italic>N</italic> is the span of the data. In contrast to the standard approach of driving <italic>N</italic> to infinity for a fixed sampling frequency, the current paper...

We study how non-listed firms trade off financial, real, and distributive uses of cash. We show that firms' marginal value of cash (MVC) affects the mix of external and internal finance used to absorb fluctuations in cash flows; in particular, high-MVC firms employ substantially more external...