thesis_bibliography.bib

@Article{AbowdCard89,
  author={Abowd, John M and Card, David},
  title={{Intertemporal Labor Supply and Long-term Employment Contracts}},
  journal={American Economic Review},
  year=1987,
  volume={77},
  number={1},
  pages={50-68},
  month={March},
  keywords={},
  abstract={ The authors compare the implications of a symmetric information contracting model and a dynamic labor supply model for changes in earnings and hours. A simple test is whether earnings changes are more variable than hours changes, as predicted by the labor supply model, or less variable, as predicted by the contracting model. The authors apply this test to two longitudinal surveys of adult men and find that earnings are somewhat more variable than hours for men who never change employers. The estimates suggest that changes in earnings and hours not associated with survey measurement error occur at fixed wage rates. Copyright 1987 by American Economic Association.},
  url={http://ideas.repec.org/a/aea/aecrev/v77y1987i1p50-68.html}
}



@Article{Aiyagari1994,
  author = {Aiyagari, S Rao},
  title = {Uninsured Idiosyncratic Risk and Aggregate Saving},
  journal = {The Quarterly Journal of Economics},
  year = 1994,
  volume = {109},
  number = {3},
  pages = {659-84},
  month = {August},
  keywords = {},
  abstract = { The author presents a qualitative and quantitative analysis of the standard growth model modified to include precautionary saving motives and liquidity constraints. He addresses the impact on the aggregate saving rate, the importance of asset trading to individuals, and the relative inequality of wealth and income distributions. Copyright 1994, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.},
  url = {http://ideas.repec.org/a/tpr/qjecon/v109y1994i3p659-84.html}
}

@Article{AAPS2013,
  author={Facundo Alvaredo and Anthony B. Atkinson and Thomas Piketty and Emmanuel Saez},
  title={{The Top 1 Percent in International and Historical Perspective}},
  journal={Journal of Economic Perspectives},
  year=2013,
  volume={27},
  number={3},
  pages={3-20},
  month={Summer},
  keywords={},
  abstract={The top 1 percent income share has more than doubled in the United States over the last 30 years, drawing much public attention in recent years. While other English-speaking countries have also experienced sharp increases in the top 1 percent income share, many high-income countries such as Japan, France, or Germany have seen much less increase in top income shares. Hence, the explanation cannot rely solely on forces common to advanced countries, such as the impact of new technologies and globalization on the supply and demand for skills. Moreover, the explanations have to accommodate the falls in top income shares earlier in the twentieth century experienced in virtually all high-income countries. We highlight four main factors. The first is the impact of tax policy, which has varied over time and differs across countries. Top tax rates have moved in the opposite direction from top income shares. The effects of top rate cuts can operate in conjunction with other mechanisms. The second factor is a richer view of the labor market, where we contrast the standard supply-side model with one where pay is determined by bargaining and the reactions to top rate cuts may lead simply to a redistribution of surplus. Indeed, top rate cuts may lead managerial energies to be diverted to increasing their remuneration at the expense of enterprise growth and employment. The third factor is capital income. Overall, private wealth (relative to income) has followed a U-shaped path over time, particularly in Europe, where inherited wealth is, in Europe if not in the United States, making a return. The fourth, little investigated, element is the correlation between earned income and capital income, which has substantially increased in recent decades in the United States.},
  url={http://ideas.repec.org/a/aea/jecper/v27y2013i3p3-20.html}
}


@Article{AlvarezJermann2001,
  author = {Alvarez, Fernando and Jermann, Urban J},
  title = {Quantitative Asset Pricing Implications of Endogenous Solvency Constraints},
  journal = {Review of Financial Studies},
  year = 2001,
  volume = {14},
  number = {4},
  pages = {1117-51},
  month = {},
  keywords = {},
  abstract = { We study the asset pricing implications of an economy where solvency constraints are endogenously determined to deter agents from defaulting while allowing as much risk sharing as possible. We solve analytically for efficient allocations and for the corresponding asset prices, portfolio holdings, and solvency constraints for a simple example. Then we calibrate a more general model to U.S. aggregate as well as idiosyncratic income processes. We find equity premia, risk premia for long-term bonds, and Sharpe ratios of magnitudes similar to the U.S. data for low risk aversion and a low time-discount factor. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.},
  url = {http://ideas.repec.org/a/oup/rfinst/v14y2001i4p1117-51.html}
}


@Article{APS1990,
  author = {Abreu, Dilip and Pearce, David and Stacchetti, Ennio},
  title = {Toward a Theory of Discounted Repeated Games with Imperfect Monitoring},
  journal = {Econometrica},
  year = 1990,
  volume = {58},
  number = {5},
  pages = {1041-63},
  month = {September},
  keywords = {},
  abstract = { This paper investigates pure strategy sequential equilibria of repeated games with imperfect monitoring. The approach emphasizes the equilibrium value set and the static optimization problems embedded in extremal equilibria. A succession of propositions, central among which is \"self-generation,\" allow properties of constrained efficient supergame equilibria to be deduced from the solutions of the static problems. The authors show that the latter include solutions having a \"bang-bang\" property; this affords a significant simplification of the equilibria that need be considered. These results apply to a broad class of asymmetric games, thereby generalizing their earlier work on optimal cartel equilibria. Copyright 1990 by The Econometric Society.},
  url = {http://ideas.repec.org/a/ecm/emetrp/v58y1990i5p1041-63.html}
}


@Article{AguiarBils2015,
  author={Mark Aguiar and Mark Bils},
  title={{Has Consumption Inequality Mirrored Income Inequality?}},
  journal={American Economic Review},
  year=2015,
  volume={105},
  number={9},
  pages={2725-56},
  month={September},
  keywords={},
  abstract={We revisit to what extent the increase in income inequality since 1980 was mirrored by consumption inequality. We do so by constructing an alternative measure of consumption expenditure using a demand system to correct for systematic measurement error in the Consumer Expenditure Survey. Our estimation exploits the relative expenditure of high- and low-income households on luxuries versus necessities. This double differencing corrects for measurement error that can vary over time by good and income. We find consumption inequality tracked income inequality much more closely than estimated by direct responses on expenditures. (JEL D31, D63, E21)},
  url={http://ideas.repec.org/a/aea/aecrev/v105y2015i9p2725-56.html}
}


@TechReport{AguiarHurst2005,
  author = {Mark Aguiar and Erik Hurst},
  title = {Consumption, Expenditure, and Home Production over the Lifecycle},
  year = 2005,
  institution = {Society for Economic Dynamics},
  type = {2005 Meeting Papers},
  url = {http://ideas.repec.org/p/red/sed005/303.html},
  number = {303},
  abstract = {No abstract is available for this item.},
  keywords = {Consumption; Home Production}
}

@Article{AguiarHurst2007,
  author = {Mark Aguiar and Erik Hurst},
  title = {Measuring Trends in Leisure: The Allocation of Time over Five Decades},
  journal = {The Quarterly Journal of Economics},
  year = 2007,
  volume = {122},
  number = {3},
  pages = {969-1006},
  month = {08},
  keywords = {},
  abstract = { In this paper, we use five decades of time-use surveys to document trends in the allocation of time within the United States. We find that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked between 1965 and 2003. Specifically, using a variety of definitions for leisure, we show that leisure for men increased by roughly six to nine hours per week (driven by a decline in market work hours) and for women by roughly four to eight hours per week (driven by a decline in home production work hours). Lastly, we document a growing inequality in leisure that is the mirror image of the growing inequality of wages and expenditures, making welfare calculation based solely on the latter series incomplete. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.},
  url = {http://ideas.repec.org/a/tpr/qjecon/v122y2007i3p969-1006.html}
}

@Article{Angelini2009,
  author = {Angelini, Viola},
  title = {Consumption and habit formation when time horizon is finite},
  journal = {Economics Letters},
  year = 2009,
  volume = {103},
  number = {2},
  pages = {113-116},
  month = {May},
  keywords = { Habit formation Life-cycle consumption Precautionary saving},
  abstract = {This paper provides a closed-form solution under labour uncertainty for optimal consumption and the value function in a finite horizon life-cycle model with habit persistence.},
  url = {http://ideas.repec.org/a/eee/ecolet/v103y2009i2p113-116.html}
}


@Article{AtkesonLucas1992,
  author = {Atkeson, Andrew and Lucas, Robert E, Jr},
  title = {On Efficient Distribution with Private Information},
  journal = {Review of Economic Studies},
  year = 1992,
  volume = {59},
  number = {3},
  pages = {427-53},
  month = {July},
  keywords = {},
  abstract = { This paper is the study of the dynamics of the efficient distribution of consumption in an exchange economy with many consumers, each of whom is subject to private, idiosyncratic taste shocks. The authors propose a recursive method for finding feasible allocations that are incentive-compatible and that are Pareto optimal within this set. The method is applied to several parametric examples. The authors find that in an efficient allocation the degree of inequality continually increases, with a diminishing fraction of the population receiving an increasing fraction of the resources. They discuss the extent to which these allocations can be decentralized via market arrangements. Copyright 1992 by The Review of Economic Studies Limited.},
  url = {http://ideas.repec.org/a/bla/restud/v59y1992i3p427-53.html}
}



@InCollection{ABI2007,
  author = {Orazio Attanasio and Erich Battistin and Hidehiko Ichimura},
  title = {What Really Happened to Consumption Inequality in the United States?},
  booktitle = {Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches},
  publisher = {National Bureau of Economic Research, Inc},
  year = 2007,
  month = {},
  volume = {},
  number = {},
  series = {NBER Chapters},
  edition = {},
  chapter = {},
  pages = {515-543},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/h/nbr/nberch/0888.html}
}

@Book{ABP2010,
  author = {Attanasio, Orazio and Battistin, Erich and Padula, Mario},
  title = {Inequality in Living Standards Since 1980},
  publisher = {AEI Press},
  year = 2010,
  month = {November},
  volume = {}
}


@TechReport{AttanasioDavis1996,
  author = {Attanasio, Orazio and Davis, S.J.},
  title = {Relative wage movements and the distribution of consumption},
  year = 1996,
  month = Dec,
  institution = {University College London},
  type = {Open Access publications from University College London},
  url = {http://ideas.repec.org/p/ner/ucllon/http--discovery.ucl.ac.uk-15224-.html},
  number = {http://discovery.ucl.ac.u},
  abstract = {The authors analyze how relative wage movements among birth cohorts and education groups affected the distribution of household consumption and economic welfare. Their empirical work draws on the best available cross-sectional data sets to construct synthetic panel data on U.S. consumption, labor supply, and wages during the 1980s. The authors find that low-frequency movements in the cohort-education structure of pretax hourly wages among men drove large changes in the distribution of household consumption. The results constitute a spectacular failure of between-group consumption insurance, a failure not explained by existing theories of informationally constrained optimal consumption behavior.},
  keywords = {}
}


@InCollection{AHP2013,
  author = {Orazio Attanasio and Erik Hurst and Luigi Pistaferri},
  title = {The Evolution of Income, Consumption, and Leisure Inequality in the US, 1980-2010},
  booktitle = {Improving the Measurement of Consumer Expenditures},
  publisher = {National Bureau of Economic Research, Inc},
  year = 2013,
  abstract = {Recent research has documented that income inequality in the United States has increased dramatically over the prior three decades. There has been less of a consensus, however, on whether the increase in income inequality was matched by an equally large increase in consumption inequality. Most researchers have studied this question using data from the Consumer Expenditure Survey (CE) and some studies have suggested that the increase in consumption inequality has been modest. Unfortunately ,there is now mounting evidence that the CE is plagued by serious non-classical measurement error, which hinders the extent to which definitive conclusions can be made about the extent to which consumption inequality has evolved over the last three decades. In this paper, we use a variety of different techniques to overcome the measurement error problems with the CE. First, we use data from the diary component of the CE, focusing on categories where measurement error has been found to be less of an issue. Second, we explore inequality measures within the CE using the value of vehicles owned, a consumption component that is considered to be measured well. Third, we try to account directly for the non-classical measurement error of the CE by comparing the spending on luxuries (entertainment) relative to necessities (food). This is similar to the recent approach taken by Browning and Crossley (2009) and Aguiar and Bils (2011). Finally, we use expenditure data from the Panel Study of Income Dynamics to explore the dynamics of alternative measures of consumption inequality. All of our different methods yield similar results. We find that consumption inequality within the U.S. between 1980 and 2010 has increased by nearly the same amount as income inequality.},
}

@TechReport{AttanasioPavoni2011,
  author = {Attanasio, Orazio and Pavoni, Nicola},
  title = {Risk sharing in private information models with asset accumulation: explaining the excess smoothness of consumption},
  year = 2011,
  month = Jul,
  institution = {University College London},
  type = {Open Access publications from University College London},
  url = {http://ideas.repec.org/p/ner/ucllon/http--discovery.ucl.ac.uk-15149-.html},
  number = {http://discovery.ucl.ac.u},
  abstract = {We study testable implications for the dynamics of consumption and income of models in which first-best allocations are not achieved because of a moral hazard problem with hidden saving. We show that in this environment, agents typically achieve more insurance than that obtained under self-insurance with a single asset. Consumption allocations exhibit \"excess smoothness,\" as found and defined by Campbell and Deaton (1989). We argue that excess smoothness, in this context, is equivalent to a violation of the intertemporal budget constraint considered in a Bewley economy (with a single asset). We also show parameterizations of our model in which we can obtain a closed-form solution for the efficient insurance contract and where the excess smoothness parameter has a structural interpretation in terms of the severity of the moral hazard problem. We present tests of excess smoothness, applied to U.K. microdata and constructed using techniques proposed by Hansen, Roberds, and Sargent (1991) to test the intertemporal budget constraint. Our theoretical model leads us to interpret them as tests of the market structure faced by economic agents. We also construct a test based on the dynamics of the cross-sectional variances of consumption and income that is, in a precise sense, complementary to that based on Hansen, Roberds, and Sargent (1991) and that allows us to estimate the same structural parameter. The results we report are consistent with the implications of the model and are internally coherent.},
  keywords = {}
}


@Article{ABMW1999,
  author = {Attanasio, Orazio and Banks, James and Meghir, Costas and Weber, Guglielmo},
  title = {Humps and Bumps in Lifetime Consumption},
  journal = {Journal of Business \& Economic Statistics},
  year = 1999,
  volume = {17},
  number = {1},
  pages = {22-35},
  month = {January},
  keywords = {},
  abstract = { In this article, the authors argue that the life-cycle model that allows demographics to affect household preferences and relaxes the assumption of certainty equivalence can generate hump-shaped consumption profiles over age that are very similar to those observed in household-level data sources and, in particular, match the differences in shape across different education groups. Liquidity constraints or myopia are not required to explain the empirical features of observed life-cycle patterns. Coauthors are James Banks, Costas Meghir, and Guglielmo Weber.},
  url = {http://ideas.repec.org/a/bes/jnlbes/v17y1999i1p22-35.html}
}

@Article{AttanasioWeber1993,
  author = {Attanasio, Orazio and Weber, Guglielmo},
  title = {Consumption Growth, the Interest Rate and Aggregation},
  journal = {Review of Economic Studies},
  year = 1993,
  volume = {60},
  number = {3},
  pages = {631-49},
  month = {July},
  keywords = {},
  abstract = { In this paper, the authors present empirical evidence on aggregation problems with Euler equations for consumption. Their main results are that the estimates of the elasticity of intertemporal substitution for consumption are consistently lower for aggregate data than for average cohort data and the theoretical model is statistically rejected on aggregate data, not rejected on average cohort data. In trying to explain these differences, the authors find that a major role is played by the nonlinearity of the estimable equation and by omitted demographic factors (normally unobservable on aggregate data). Copyright 1993 by The Review of Economic Studies Limited.},
  url = {http://ideas.repec.org/a/bla/restud/v60y1993i3p631-49.html}
}


@Article{AttanasioWeber2010,
  author = {Orazio Attanasio and Guglielmo Weber},
  title = {Consumption and Saving: Models of Intertemporal Allocation and Their Implications for Public Policy},
  journal = {Journal of Economic Literature},
  year = 2010,
  volume = {48},
  number = {3},
  pages = {693-751},
  month = {September},
  keywords = {},
  abstract = {This paper provides a critical survey of the large literature on the life cycle model of consumption, both from an empirical and a theoretical point of view. It discusses several approaches that have been taken in the literature to bring the model to the data, their empirical successes, and their failures. Finally, the paper reviews a number of changes to the standard life cycle model that could help solve the remaining empirical puzzles.},
  url = {http://ideas.repec.org/a/aea/jeclit/v48y2010i3p693-751.html}
}



@TechReport{AutorKatzKearney2005,
  author = {David H. Autor and Lawrence F. Katz and Melissa S. Kearney},
  title = {Trends in U.S. Wage Inequality: Re-Assessing the Revisionists},
  year = 2005,
  month = Sep,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/11627.html},
  number = {11627},
  abstract = {A recent \"revisionist \" literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an \"episodic \" event of the first-half of the 1980s driven by non-market factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality -- which has increased steadily since 1980, even adjusting for changes in labor force composition -- and lower tail (50/10) inequality, which rose sharply in the first-half of the 1980s and plateaued or contracted thereafter. Fluctuations in the real minimum wage are not a plausible explanation for these trends since the bulk of inequality growth occurs above the median of the wage distribution. Models emphasizing rapid secular growth in the relative demand for skills -- attributable to skill-biased technical change -- and a sharp deceleration in the relative supply of college workers in the 1980s do an excellent job of capturing the evolution of the college/high-school wage premium over four decades. But these models also imply a puzzling deceleration in relative demand growth for college workers in the early 1990s, also visible in a recent \"polarization\" of skill demands in which employment has expanded in high-wage and low-wage work at the expense of middle-wage jobs. These patterns are potentially reconciled by a modified version of the skill-biased technical change hypothesis that emphasizes the role of information technology in complementing abstract (high-education) tasks and substituting for routine (middle-education) tasks.},
  keywords = {}
}

@Article{AutorKatzKearney2008,
  author = {David H. Autor and Lawrence F. Katz and Melissa S. Kearney},
  title = {Trends in U.S. Wage Inequality: Revising the Revisionists},
  journal = {The Review of Economics and Statistics},
  year = 2008,
  volume = {90},
  number = {2},
  pages = {300-323},
  month = {May},
  keywords = {},
  abstract = { A recent \"revisionist\" literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an \"episodic\" event of the first half of the 1980s driven by nonmarket factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality-which has increased steadily since 1980, even adjusting for changes in labor force composition-and lower-tail (50/10) inequality, which rose sharply in the first half of the 1980s and plateaued or contracted thereafter. Fluctuations in the real minimum wage are not a plausible explanation for these trends since the bulk of inequality growth occurs above the median of the wage distribution. Models emphasizing rapid secular growth in the relative demand for skills-attributable to skill-biased technical change-and a sharp deceleration in the relative supply of college workers in the 1980s do an excellent job of capturing the evolution of the college/high school wage premium over four decades. But these models also imply a puzzling deceleration in relative demand growth for college workers in the early 1990s, also visible in a recent \"polarization\" of skill demands in which employment has expanded in high-wage and low-wage work at the expense of middle-wage jobs. These patterns are potentially reconciled by a modified version of the skill-biased technical change hypothesis that emphasizes the role of information technology in complementing abstract (high-education) tasks and substituting for routine (middle-education) tasks. Copyright by the President and Fellows of Harvard College and the Massachusetts Inst},
  url = {http://ideas.repec.org/a/tpr/restat/v90y2008i2p300-323.html}
}

@Article{Baker1997,
  author={Baker, Michael},
  title={{Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings}},
  journal={Journal of Labor Economics},
  year=1997,
  volume={15},
  number={2},
  pages={338-75},
  month={April},
  keywords={},
  abstract={ Using U.S. panel data on adult males, the author compares the 'profile heterogeneity model' of earnings dynamics, in which the earnings-experience profile varies across individuals, to a competing model in which earnings 'has a unit root.' The latter specification enjoys increasing popularity among researchers. The author's analysis questions this favor, suggesting the profile heterogeneity model provides a more consistent representation of the data. He also provides new estimates of the variation in earnings growth rates. Previous evidence is from relatively unrepresentative samples. Individuals one standard deviation above the mean enjoy a 20-30 percent earnings advantage in just ten years. Copyright 1997 by University of Chicago Press.},
  url={http://ideas.repec.org/a/ucp/jlabec/v15y1997i2p338-75.html}
}




@TechReport{Baker2014,
  author={Baker, Scott R.},
  title={Debt and the Consumption Response to Household Income Shocks},
  year=2014,
  institution={Stanford University},
  type={Working Paper},
}

@TechReport{BakijaColeHeim2012,
  author={Jon Bakija and Adam Cole and Bradley Heim},
  title={{Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data}},
  year=2012,
  month=Mar,
  institution={Department of Economics, Williams College},
  type={Department of Economics Working Papers},
  url={http://ideas.repec.org/p/wil/wileco/2010-22.html},
  number={2010-22},
  abstract={This paper presents summary statistics on the occupations of taxpayers in the top percentile of the national income distribution and fractiles thereof, as well as the patterns of real income growth between 1979 and 2005 for top earners in each occupation, based on information reported on U.S. individual income tax returns. The data demonstrate that executives, managers, supervisors, and financial professionals account for about 60 percent of the top 0.1 percent of income earners in recent years, and can account for 70 percent of the increase in the share of national income going to the top 0.1 percent of the income distribution between 1979 and 2005. During 1979-2005 there was substantial heterogeneity in growth rates of income for top earners across occupations, and significant divergence in incomes within occupations among people in the top 1 percent. We consider the implications for various competing explanations for the substantial changes in income inequality that have occurred in the U.S. in recent times. We then use panel data on U.S. tax returns spanning the years 1987 through 2005, to estimate the elasticity of gross income with respect to net-of-tax share (that is, one minus the marginal tax rate). Information on occupation allows us to control for other influences on income in a flexible way using interactions among occupation, position in the income distribution, stock prices, housing prices, and the business cycle. We also allow for income shifting across years in response to anticipated tax changes, for the long-run effect of a tax reform to differ from the short-run effects, for heterogeneous mean-reversion across incomes, and for heterogeneous elasticities across income classes. In a specification that does all this, we estimate a significant elasticity of 0.7 among taxpayers in the top 0.1 percent of the income distribution. Outside of the top 0.1 percent of the income distribution, we find no conclusive evidence of a positive elasticity of income w},
  keywords={income distribution; behavioral response to taxation},
}


@Article{BanksBlundellLewbel1997,
  author = {James Banks and Richard Blundell and Arthur Lewbel},
  title = {Quadratic Engel Curves And Consumer Demand},
  journal = {The Review of Economics and Statistics},
  year = 1997,
  volume = {79},
  number = {4},
  pages = {527-539},
  month = {November},
  keywords = {},
  abstract = { This paper presents a model of consumer demand that is consistent with the observed expenditure patterns of individual consumers in a long time series of expenditure surveys and is also able to provide a detailed welfare analysis of shifts in relative prices. A nonparametric analysis of consumer expenditure patterns suggests that Engel curves require quadratic terms in the logarithm of expenditure. While popular models of demand such as the Translog or the Almost Ideal Demand Systems do allow flexible price responses within a theoretically coherent structure, they have expenditure share Engel curves that are linear in the logarithm of total expenditure. We derive the complete class of integrable quadratic logarithmic expenditure share systems. A specification from this class is estimated on a large pooled data set of U.K. households. Models that fail to account for Engel curvature are found to generate important distortions in the patterns of welfare losses associated with a tax increase. � 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology},
  url = {http://ideas.repec.org/a/tpr/restat/v79y1997i4p527-539.html}
}

@Article{BanksBlundellTanner1998,
  author = {Banks, James and Blundell, Richard and Tanner, Sarah},
  title = {Is There a Retirement-Savings Puzzle?},
  journal = {American Economic Review},
  year = 1998,
  volume = {88},
  number = {4},
  pages = {769-88},
  month = {September},
  keywords = {},
  abstract = { This paper addresses whether households save enough for their retirement. For successive date-of-birth cohorts the authors analyze income and expenditure patterns around the time of retirement. They find a fall in consumption as household heads retire which cannot be fully explained by a forward-looking consumption-smoothing model that accounts for expected demographic changes and mortality risk. Controlling for labor-market participation explains part, but not all, of this dip. The authors argue that the only way to reconcile fully the fall in consumption with the life-cycle hypothesis is with the systematic arrival of unexpected adverse information. Copyright 1998 by American Economic Association.},
  url = {http://ideas.repec.org/a/aea/aecrev/v88y1998i4p769-88.html}
}


@Article{BarbaPivetti2009,
  author = {Aldo Barba and Massimo Pivetti},
  title = {Rising household debt: Its causes and macroeconomic implications--a long-period analysis},
  journal = {Cambridge Journal of Economics},
  year = 2009,
  volume = {33},
  number = {1},
  pages = {113-137},
  month = {January},
  keywords = {},
  abstract = { The article analyses the rise in household indebtedness from the point of view of its causes and long-run macroeconomic implications. The analysis is focussed on the US case. Differently from life-cycle interpretations of the phenomenon, and from interpretations in terms of erratic deviations of current income flows from their long-run trend, the rising household debt is viewed as the outcome of persistent changes in income distribution and growing income inequalities. Through household debt, low wages appear to have been brought to coexist with relatively high levels of aggregate demand, thus providing the solution to the contradiction between the necessity of high and rising consumption levels, for the growth of the system's actual output, and a framework of antagonistic conditions of distribution which keeps within limits the real income of the vast majority of society. The question of the long-run sustainability of this substitution of loans for wages is finally discussed. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.},
  url = {http://ideas.repec.org/a/oup/cambje/v33y2009i1p113-137.html}
}


@Article{BarksyMankiwZeldes1986,
  author = {Barsky, Robert B and Mankiw, N Gregory and Zeldes, Stephen P},
  title = {Ricardian Consumers with Keynesian Propensities},
  journal = {American Economic Review},
  year = 1986,
  volume = {76},
  number = {4},
  pages = {676-91},
  month = {September},
  keywords = {},
  abstract = { This paper examines Ricardian equivalence in a world in which taxes arenot lump sum, but are levied on risky labor income. It shows that themarginal propensity to consume out of a tax cut, coupled with a futureincome tax increase, can be substantial under plausible assumptions. Indeed, the MPC out of a tax cut can be closer to the Keynesian valuethat ignores the future tax liabilities than to the Ricardian value that treats future taxes as if they were lump sum. Copyright 1986 by American Economic Association.},
  url = {http://ideas.repec.org/a/aea/aecrev/v76y1986i4p676-91.html}
}


@Article{BattistinBlundellLewbel2009,
  author = {Erich Battistin and Richard Blundell and Arthur Lewbel},
  title = {Why Is Consumption More Log Normal than Income? Gibrat's Law Revisited},
  journal = {Journal of Political Economy},
  year = 2009,
  volume = {117},
  number = {6},
  pages = {1140-1154},
  month = {December},
  keywords = {},
  abstract = { Significant departures from log normality are observed in income data, in violation of Gibrat's law. We show empirically that the distribution of consumption expenditures across households is, within cohorts, closer to log normal than the distribution of income. We explain this empirical result by showing that the logic of Gibrat's law applies not to total income, but to permanent income and to marginal utility. (c) 2009 by The University of Chicago. All rights reserved..},
  url = {http://ideas.repec.org/a/ucp/jpolec/v117y2009i6p1140-1154.html}
}


@TechReport{BebchuckFried2004,
  author = {Bebchuck, Lucian A. and Fried, Jesse M.},
  title = {Pay Without Performance: The Unfulfilled Promise of Executive Compensation},
  year = 2004,
  institution = {Harvard University}
}


@Article{BenhabibBisinZhu2011,
  author = {Jess Benhabib and Alberto Bisin and Shenghao Zhu},
  title = {The Distribution of Wealth and Fiscal Policy in Economies With Finitely Lived Agents},
  journal = {Econometrica},
  year = 2011,
  volume = {79},
  number = {1},
  pages = {123-157},
  month = {01},
  keywords = {},
  abstract = {We study the dynamics of the distribution of overlapping generation economy with finitely lived agents and inter-generational transmission of wealth. Financial markets are incomplete, exposing agents to both labor income and capital income risk. We show that the stationary wealth distribution is a Pareto distribution in the right tail and that it is capital income risk, rather than labor income, that drives the properties of the right tail of the wealth distribution. We also study analytically the dependence of the distribution of wealth, of wealth inequality in particular, on various fiscal policy instruments like capital income taxes and estate taxes. We show that capital income and estate taxes can significantly reduce wealth inequality. Finally, we characterize optimal redistributive taxes with respect to a utilitarian social welfaremeasure. Social welfare is maximized short of minimal wealth inequality and with zero estate taxes. Finally, we study the effects of different degrees of social mobility on the wealth distribution.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/ecm/emetrp/v79y2011i1p123-157.html}
}


@TechReport{BergOstry2011,
  author = {Jonathan David Ostry and Andrew Berg},
  title = {Inequality and Unsustainable Growth: Two Sides of the Same Coin?},
  year = 2011,
  month = Apr,
  institution = {International Monetary Fund},
  type = {IMF Staff Discussion Notes},
  url = {http://ideas.repec.org/p/imf/imfsdn/11-08.html},
  number = {11/08},
  abstract = {This note raises the IMF’s profile on a number of issues related to inequality, unemployment, governance, etc. It builds on earlier empirical work that examined correlations between growth downbreaks/duration of growth spells and a range of macro/policy/institutional factors. This paper is designed to be more accessible, more policy oriented, and focused squarely on the issue of inequality and the sustainability of growth. It will reference the literature that has gained prominence in the wake of the global crisis, and the possible links between the crisis and rising inequality in countries at the epicenter of the crisis. The analytical findings will also be connected to real world policy narratives in certain countries, to provide texture to the results and enhance policy relevance. The paper will argue that, based on the empirical findings, more equality in the income distribution is associated with longer-lived growth spells. Broad redistributive policies are not necessarily pro-growth, however, as these can have strong disincentive effects. The paper’s policy discussion is appropriately cautious, therefore, offering only tentative ideas, for example, active labor market policies and more attention to human capital investments designed to avoid conflicts between efficiency and equity perspectives.},
  keywords = {Income distribution; Developed countries; Developing countries; Economic growth; Emerging markets; P}
}


@Article{BernardJensen1995,
  author = {Andrew Bernard and Bradford Jensen},
  title = {Exporters, Jobs and Wages in U.S. Manufacturing},
  journal = {Brookings Papers on Economic Activity: Microeconomics},
  year = 1995,
  pages = {67-112}
}

@TechReport{Bernanke2005,
  author={Ben S. Bernanke},
  title={{The global saving glut and the U.S. current account deficit}},
  year=2005,
  institution={Board of Governors of the Federal Reserve System (U.S.)},
  type={Speech},
  url={http://ideas.repec.org/p/fip/fedgsq/77.html},
  number={77},
  abstract={a speech at the Sandridge Lecture, Virginia Association of Economics, Richmond, Virginia, March 10, 2005 and the Homer Jones Lecture, St. Louis, Missouri, on April 14, 2005},
  keywords={Balance of trade ; Budget deficits ; International finance},
}



@techreport{BertrandMorse2012,
  title  =  "Trickle-Down Consumption",
  author  =  "Marianne Bertrand and Adair Morse",
  institution  =  "National Bureau of Economic Research",
  type  =  "Working Paper",
  series  =  "Working Paper Series",
  number  =  "18883",
  year  =  "2013",
  month  =  "March",
  URL  =  "http://www.nber.org/papers/w18883",
  abstract  =  {Have rising income and consumption at the top of income distribution since the early 1980s induced households in the lower tiers of the distribution to consume a larger share of their income? Using state-year variation in income level and consumption in the top first quintile or decile of the income distribution, we find evidence for such �trickle-down consumption.� The magnitude of effect suggests that middle income households would have saved between 2.6 and 3.2 percent more by the mid-2000s had incomes at the top grown at the same rate as median income. Additional tests argue against permanent income, upwardly-biased expectations of future income, home equity effects and upward price pressures as the sole explanations for this finding.  Instead, we show that middle income households� consumption of more income elastic and more visible goods and services appear particularly responsive to top income levels, consistent with supply-driven demand and status-driven explanations  for our primary finding. Non-rich households exposed to higher top income levels self-report more financial duress; moreover, higher top income levels are predictive of more personal bankruptcy filings. Finally, focusing on housing credit legislation, we suggest that the political process may have internalized and facilitated such trickle-down.},
}


@Article{Bewley1977,
  author = {Bewley, Truman},
  title = {The permanent income hypothesis: A theoretical formulation},
  journal = {Journal of Economic Theory},
  year = 1977,
  volume = {16},
  number = {2},
  pages = {252-292},
  month = {December},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/eee/jetheo/v16y1977i2p252-292.html}
}

@Article{BlundellPreston1998,
  author = {Richard Blundell and Ian Preston},
  title = {Consumption Inequality And Income Uncertainty},
  journal = {The Quarterly Journal of Economics},
  year = 1998,
  volume = {113},
  number = {2},
  pages = {603-640},
  month = {May},
  keywords = {},
  abstract = { This paper places the debate over using consumption or income in studies of inequality growth in a formal intertemporal setting. It highlights the importance of permanent and transitory income uncertainty in the evaluation of growth in consumption inequality.We derive conditions under which the growth of variances and covariances of income and consumption can be used to separately identify the growth in the variance of permanent and transitory income shocks. Household data from Britain for the period 1968-1992 are used to show a strong growth in transitory inequality toward the end of this period, while younger cohorts are shown to face significantly higher levels of permanent inequality. � 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology},
  url = {http://ideas.repec.org/a/tpr/qjecon/v113y1998i2p603-640.html}
}


@Article{BlundellEtheridge2010,
  author={Richard Blundell and Ben Etheridge},
  title={{Consumption, Income and Earnings Inequality in Britain}},
  journal={Review of Economic Dynamics},
  year=2010,
  volume={13},
  number={1},
  pages={76-102},
  month={January},
  keywords={Inequality; Consumption; Income; Distributional Dynamics},
  abstract={This paper presents an analysis of the trends in inequality across income, earnings and consumption in Britain since 1978. It documents the episodic nature of inequality growth over this period largely dominated by the inequality 'boom' in earnings inequality of the 1980s. It builds a consistent picture across these key measures of inequality to provide a coherent link between the microeconomic and macroeconomic analysis of the evolution of inequality. (Copyright: Elsevier)},
  url={http://ideas.repec.org/a/red/issued/09-202.html}
}


@TechReport{BlundellPistaferriPreston2004,
  author = {Richard Blundell and Luigi Pistaferri and Ian Preston},
  title = {Imputing consumption in the PSID using food demand estimates from the CEX},
  year = 2004,
  month = Oct,
  institution = {Institute for Fiscal Studies},
  type = {IFS Working Papers},
  url = {http://ideas.repec.org/p/ifs/ifsewp/04-27.html},
  number = {W04/27},
  abstract = {This paper assesses the accuracy of decomposing income risk into permanent and transitory components using income and consumption data. We develop a specific approximation to the optimal consumption growth rule and use Monte Carlo evidence to show that this approximation can provide a robust method for decomposing income risk. The availability of asset data enables the use of a more accurate approximation allowing for partial sef-insurance against permanent shocks. We show that the use of data on median asset holdings corrects much of the error in the simple approximation which assumes no self-insurance against permanent shocks.},
  keywords = {}
}


@Article{BlundellPistaferriPreston2008,
  author = {Richard Blundell and Luigi Pistaferri and Ian Preston},
  title = {Consumption Inequality and Partial Insurance},
  journal = {American Economic Review},
  year = 2008,
  volume = {98},
  number = {5},
  pages = {1887-1921},
  month = {December},
  keywords = {},
  abstract = {This paper examines the link between income and consumption inequality. We create panel data on consumption for the Panel Study of Income Dynamics using an imputation procedure based on food demand estimates from the Consumer Expenditure Survey. We document a disjuncture between income and consumption inequality over the 1980s and show that it can be explained by changes in the persistence of income shocks. We find some partial insurance of permanent shocks, especially for the college educated and those near retirement. We find full insurance of transitory shocks except among poor households. Taxes, transfers, and family labor supply play an important role in insuring permanent shocks. (JEL D12, D31, D91, E21)},
  url = {http://ideas.repec.org/a/aea/aecrev/v98y2008i5p1887-1921.html}
}

@Article{BosworthBurtlessSabelhaus1991,
  author = {Barry Bosworth and Gary Burtless and John Sabelhaus},
  title = {The Decline in Saving: Some Microeconomic Evidence},
  journal = {Brookings Papers on Economic Activity},
  year = 1991,
  volume = {22},
  number = {1},
  pages = {183-256},
  month = {},
  keywords = {macroeconomics; saving; microeconomic},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/bin/bpeajo/v22y1991i1991-1p183-256.html}
}


@TechReport{Boveretal2014,
  author={Bover, Olympia and Casado, Jose Maria and Costa, Sonia and Du Caju, Philip and McCarthy, Yvonne and Sierminska, Eva and Tzamourani, Panagiota and Villanueva, Ernesto and Zavadil, Tibor},
  title={{The distribution of debt across euro area countries: The role of individual characteristics, institutions and credit conditions}},
  year=2014,
  month=Nov,
  institution={Deutsche Bundesbank, Research Centre},
  type={Discussion Papers},
  url={http://ideas.repec.org/p/zbw/bubdps/012014.html},
  number={01/2014},
  abstract={The aim of this paper is twofold. First, we present an up-to-date assessment of the differences across euro area countries in the distributions of various measures of debt conditional on household characteristics. We consider three different outcomes: the probability of holding debt, the amount of debt held and, in the case of secured debt, the interest rate paid on the main mortgage. Second, we examine the role of legal and economic institutions in accounting for these differences. We use data from the first wave of a new survey of household finances, the Household Finance and Consumption Survey, to achieve these aims. We find that the patterns of secured and unsecured debt outcomes vary markedly across countries. Among all the institutions considered, the length of asset repossession periods best accounts for the features of the distribution of secured debt. In countries with longer repossession periods, the fraction of people who borrow is smaller, the youngest group of households borrow lower amounts (conditional on borrowing), and the mortgage interest rates paid by low-income households are higher. Regulatory loan-to-value ratios, the taxation of mortgages and the prevalence of interest-only or fixed-rate mortgages deliver less robust results. --},
  keywords={Household debt and interest rate distributions; Time to Foreclose; Taxation; Loanto-Value ratios; Fi},
}



@Article{Broer2013,
  author = {Tobias Broer},
  title = {The Wrong Shape of Insurance? What Cross-Sectional Distributions Tell Us about Models of Consumption Smoothing},
  journal = {American Economic Journal: Macroeconomics},
  year = 2013,
  volume = {5},
  number = {4},
  pages = {107-40},
  month = {October},
  keywords = {},
  abstract = {This paper shows how two standard models of consumption risk-sharing?self-insurance through borrowing and saving and limited commitment to insurance contracts?replicate similarly well the standard, second-moment measures of insurance observed in US micro data. A nonparametric analysis, however, reveals strongly contrasting and counterfactual joint distributions of consumption, income and wealth. Method of moments estimation shows how measurement error in consumption eliminates excessive skewness and smoothness of consumption growth. Moreover, counterfactual nonlinearities disappear at high-estimated risk aversion under selfinsurance, but are a robust feature of limited commitment. Its \&quot;shape of insurance\&quot; thus argues in favor of the self-insurance model.},
  url = {http://ideas.repec.org/a/aea/aejmac/v5y2013i4p107-40.html}
}



@Article{BrowningCrossley2001,
  author = {Martin Browning and Thomas F. Crossley},
  title = {The Life-Cycle Model of Consumption and Saving},
  journal = {Journal of Economic Perspectives},
  year = 2001,
  volume = {15},
  number = {3},
  pages = {3-22},
  month = {Summer},
  keywords = {},
  abstract = {A central implication of life-cycle models is that agents smooth consumption. We review the empirical evidence on smoothing at frequencies from within the year up to across a lifetime. We find that life-cycle models--particular those which incorporate realistic features of markets and goods--have more empirical successes than failures. We also show that some apparent deviations from theoretical predictions imply very small welfare losses for agents. Finally, we emphasize that the coherence of life-cycle models imposes an important discipline when incorporating new features into models.},
  url = {http://ideas.repec.org/a/aea/jecper/v15y2001i3p3-22.html}
}

@Article{BrowningEjrnaesAlvarez2010,
  author={Martin Browning and Mette Ejrn�s and Javier Alvarez},
  title={{Modelling Income Processes with Lots of Heterogeneity}},
  journal={Review of Economic Studies},
  year=2010,
  volume={77},
  number={4},
  pages={1353-1381},
  month={},
  keywords={},
  abstract={ We model earnings processes allowing for lots of heterogeneity across agents. We also introduce an extension to the linear ARMA model which allows the initial convergence in the long run to be different from that implied by the conventional ARMA model. This is particularly important for unit root tests, which are actually tests of a composite of two independent hypotheses. We fit to a variety of statistics including most of those considered by previous investigators. We use a sample drawn from the Panel Study of Income Dynamics (PSID), and focus on white males with a high-school degree. Despite this observable homogeneity, we find more latent heterogeneity than previous investigators. We show that allowance for heterogeneity makes substantial differences to estimates of model parameters and to outcomes of interest. Additionally, we find strong evidence against the hypothesis that any worker has a unit root. Copyright , Wiley-Blackwell.},
  url={http://ideas.repec.org/a/oup/restud/v77y2010i4p1353-1381.html}
}




@TechReport{BucherKoenenLusardi2011,
  author = {Tabea Bucher-Koenen and Annamaria Lusardi},
  title = {Financial Literacy and Retirement Planning in Germany},
  year = 2011,
  month = Mar,
  institution = {Center for Research on Pensions and Welfare Policies, Turin (Italy)},
  type = {CeRP Working Papers},
  url = {http://ideas.repec.org/p/crp/wpaper/109.html},
  number = {109},
  abstract = {We examine financial literacy in Germany using data from the SAVE survey. We find that knowledge of basic financial concepts is lacking among women, the less educated, and those living in East Germany. In particular, those with low education and low income in East Germany have little financial literacy compared to their West German counterparts. Interestingly, there is no gender disparity in financial knowledge in the East. In order to investigate the nexus of causality between financial literacy and retirement planning we develop an IV strategy by making use of regional variation in the financial knowledge of peers. We find a positive impact of financial knowledge on retirement planning.},
  keywords = {Financial sophistication; retirement planning; life-cycle savings; financial education; East Germany}
}



@Article{Cagetti2003,
  author = {Cagetti, Marco},
  title = {Wealth Accumulation over the Life Cycle and Precautionary Savings},
  journal = {Journal of Business \& Economic Statistics},
  year = 2003,
  volume = {21},
  number = {3},
  pages = {339-53},
  month = {July},
  keywords = {},
  abstract = { This article constructs and simulates a life cycle model of wealth accumulation and estimates the parameters of the utility function (the rate of time preference and the coefficient of risk aversion) by matching the simulated median wealth profiles with those observed in the Panel Study of Income Dynamics and in the Survey of Consumer Finances. The estimates imply a low degree of patience and a high degree of risk aversion. The results are used to study the importance of precautionary savings in explaining wealth accumulation. They imply that wealth accumulation is driven mostly by precautionary motives at the beginning of the life cycle, whereas savings for retirement purposes become significant only closer to retirement.},
  url = {http://ideas.repec.org/a/bes/jnlbes/v21y2003i3p339-53.html}
}


@Article{Cagetti2006,
  author={Marco Cagetti and Mariacristina De Nardi},
  title={{Entrepreneurship, Frictions, and Wealth}},
  journal={Journal of Political Economy},
  year=2006,
  volume={114},
  number={5},
  pages={835-870},
  month={October},
  keywords={},
  abstract={This paper constructs and calibrates a parsimonious model of occupational choice that allows for entrepreneurial entry, exit, and investment decisions in the presence of borrowing constraints. The model fits very well a number of empirical observations, including the observed wealth distribution for entrepreneurs and workers. At the aggregate level, more restrictive borrowing constraints generate less wealth concentration and reduce average firm size, aggregate capital, and the fraction of entrepreneurs. Voluntary bequests allow some high-ability workers to establish or enlarge an entrepreneurial activity. With accidental bequests only, there would be fewer very large firms and less aggregate capital and wealth concentration.},
  url={http://ideas.repec.org/a/ucp/jpolec/v114y2006i5p835-870.html}
}



@Article{CaiJudd2012,
  author={Cai, Yongyang and Judd, Kenneth L.},
  title={{Dynamic programming with shape-preserving rational spline Hermite interpolation}},
  journal={Economics Letters},
  year=2012,
  volume={117},
  number={1},
  pages={161-164},
  month={},
  keywords={Numerical dynamic programming; Shape-preserving approximation; Hermite interpolation; Rational funct},
  abstract={Numerical methods for dynamic programming often use value function iteration and interpolation. We present a novel shape-preserving rational spline approximation method that improves value function iteration in terms of both stability and accuracy compared to more common methods.},
  url={http://ideas.repec.org/a/eee/ecolet/v117y2012i1p161-164.html}
}




@article{CaiJudd2013,
  author = {Cai, Yongyang and Judd, Kenneth L.},
  ee = {http://dx.doi.org/10.1007/s00186-012-0406-5},
  interhash = {2d6e1f329b189d98ff779a9650663023},
  intrahash = {f7d0d0d940a372afab9139918d132e65},
  journal = {Math. Meth. of OR},
  keywords = {dblp},
  number = 3,
  pages = {407-421},
  timestamp = {2013-07-15T00:00:00.000+0200},
  title = {Shape-preserving dynamic programming.},
  url = {http://dblp.uni-trier.de/db/journals/mmor/mmor77.html#CaiJ13},
  volume = 77,
  year = 2013
}


@Article{CagettiDeNardi2006,
  author={Marco Cagetti and Mariacristina DeNardi},
  title={{Entrepreneurship, Frictions, and Wealth}},
  journal={Journal of Political Economy},
  year=2006,
  volume={114},
  number={5},
  pages={835-870},
  month={October},
  keywords={},
  abstract={This paper constructs and calibrates a parsimonious model of occupational choice that allows for entrepreneurial entry, exit, and investment decisions in the presence of borrowing constraints. The model fits very well a number of empirical observations, including the observed wealth distribution for entrepreneurs and workers. At the aggregate level, more restrictive borrowing constraints generate less wealth concentration and reduce average firm size, aggregate capital, and the fraction of entrepreneurs. Voluntary bequests allow some high-ability workers to establish or enlarge an entrepreneurial activity. With accidental bequests only, there would be fewer very large firms and less aggregate capital and wealth concentration.},
  url={http://ideas.repec.org/a/ucp/jpolec/v114y2006i5p835-870.html}
}




@TechReport{CampbellDeaton1989,
  author = {John Y. Campbell and Angus Deaton},
  title = {Is Consumption Too Smooth?},
  year = 1989,
  month = Nov,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/2134.html},
  number = {2134},
  abstract = {For thirty years, it has been accepted that consumption is smooth because permanent income is smoother than measured income. This paper considers the evidence for the contrary position, that permanent income is in fact less smooth than measured income, so that the smoothness of consumption cannot be straightforwardly explained by permanent income theory. Quarterly first differences of labor income in the United States are well described by an AR(1) with a positive autoregressive parameter. Innovations to such a process are \&quot;more than permanent;\&quot; there is no deterministic trend to which the series must eventually return, and good or bad fortune in one period can be expected to be at least partially repeated in the next. Changes to permanent income should therefore be greater than the innovations to measured income, and changes in consumption should be more variable than innovations to measured income. In fact, changes in consumption are much less variable than are income innovations. We consider two possible explanations for this paradox, first, that innovations to labor income are in reality much less persistent than appears from an AR(l), and second, that consumers have more information than do econometricians, so that only a fraction of the estimated innovations are actually unexpected by consumers. The univariate time series results are less than decisive, but the balance of the evidence, whether from fitting ARMA models or from examining the spectral density, is more favorable to the view that innovations are persistent than to the opposite view, that there is slow reversion to trend. The information question is taken up within a bivariate model of income and savings that can accommodate the feedback from saving to income that is predicted by the permanent income theory if consumers have superior information. Nevertheless, our results are the same; changes in consumption are typically smaller than those warranted by the change in permanent income. We s},
  keywords = {}
}



@TechReport{CampbellMankiw1990a,
  author = {John Y. Campbell and N. Gregory Mankiw},
  title = {Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence},
  year = 1990,
  month = May,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/2924.html},
  number = {2924},
  abstract = {This paper proposes that the time-series data on consumption, income, and interest rates are best viewed as generated not by a single representative consumer but by two groups of consumers. Half the consumers are forward-looking and consume their permanent income, but are extremely reluctant to substitute consumption temporarily. Half the consumers follow the \&quot;rule of thumb\&quot; of consuming their current income. The paper documents three empirical regularities that, it argues, are best explained by this medal. First, expected changes in income are associated with expected changes in consumption. Second, expected real interest rates are not associated with expected changes in consumption. Third, periods in which consumption is high relative to income are typically followed by high growth in income. The paper concludes by briefly discussing the implications of these findings for economic policy and economic research.},
  keywords = {}
}


@Article{CampbellMankiw1990b,
  author = {Campbell, John Y and Mankiw, N Gregory},
  title = {Permanent Income, Current Income, and Consumption},
  journal = {Journal of Business \& Economic Statistics},
  year = 1990,
  volume = {8},
  number = {3},
  pages = {265-79},
  month = {July},
  keywords = {},
  abstract = { This article reexamines the consistency of the permanent-income hypothesis with aggregate postwar U.S. data. The permanent-income hypothesis is nested within a more general model in which a fraction of income accrues to individuals who consume their current income rather than their permanent income. This fraction is estimated to be about 50 percent, indicating a substantial departure from the permanent-income hypothesis. Our results cannot be easily explained by time aggregation for small-sample bias, by managers in the real interest rate, or by nonseparabilities in the utility function of consumers.},
  url = {http://ideas.repec.org/a/bes/jnlbes/v8y1990i3p265-79.html}
}

@Article{CampbellMankiw1991,
  author = {Campbell, John Y. and Mankiw, N. Gregory},
  title = {The response of consumption to income : A cross-country investigation},
  journal = {European Economic Review},
  year = 1991,
  volume = {35},
  number = {4},
  pages = {723-756},
  month = {May},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/eee/eecrev/v35y1991i4p723-756.html}
}

@Article{CardDiNardo2002,
  author = {David Card and John E. DiNardo},
  title = {Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles},
  journal = {Journal of Labor Economics},
  year = 2002,
  volume = {20},
  number = {4},
  pages = {733-783},
  month = {October},
  keywords = {},
  abstract = {The recent rise in wage inequality is usually attributed to skill-biased technical change (SBTC), associated with new computer technologies. We review the evidence for this hypothesis, focusing on the implications of SBTC for overall wage inequality and for changes in wage differentials between groups. A key problem for the SBTC hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology; SBTC also fails to explain the evolution of other dimensions of wage inequality, including the gender and racial wage gaps and the age gradient in the return to education.},
  url = {http://ideas.repec.org/a/ucp/jlabec/v20y2002i4p733-783.html}
}


@Article{CardHeinigKline2013,
  author = {David Card and J�rg Heining and Patrick Kline},
  title = {Workplace Heterogeneity and the Rise of West German Wage Inequality},
  journal = {The Quarterly Journal of Economics},
  year = 2013,
  volume = {128},
  number = {3},
  pages = {967-1015},
  month = {},
  keywords = {},
  abstract = { We study the role of establishment-specific wage premiums in generating recent increases in West German wage inequality. Models with additive fixed effects for workers and establishments are fit into four subintervals spanning the period from 1985 to 2009. We show that these models provide a good approximation to the wage structure and can explain nearly all of the dramatic rise in West German wage inequality. Our estimates suggest that the increasing dispersion of West German wages has arisen from a combination of rising heterogeneity between workers, rising dispersion in the wage premiums at different establishments, and increasing assortativeness in the assignment of workers to plants. In contrast, the idiosyncratic job-match component of wage variation is small and stable over time. Decomposing changes in mean wages between different education groups, occupations, and industries, we find that increasing plant-level heterogeneity and rising assortativeness in the assignment of workers to establishments explain a large share of the rise in inequality along all three dimensions. JEL Codes: J00, J31, J40. Copyright 2013, Oxford University Press.},
  url = {http://ideas.repec.org/a/oup/qjecon/v128y2013i3p967-1015.html}
}


@Article{Carroll1992,
  author = {Carroll, Christopher D.},
  title = {The Buffer-Stock Theory of Saving: Some Macroeconomic Evidence},
  journal = {Brookings Papers on Economic Activity},
  year = {1992},
  pages = {61-156},
}

@Article{Carroll2000,
  author = {Carroll, Christopher D.},
  title = {Solving consumption models with multiplicative habits},
  journal = {Economics Letters},
  year = 2000,
  volume = {68},
  number = {1},
  pages = {67-77},
  month = {July},
  keywords = {},
  abstract = {This paper provides derivations necessary for solving an optimal consumption problem with multiplicative habits and a CRRA 'outer' utility function either for a microeconomic problem with both labor income risk and rate-of-return risk or for a macroeoconomic representative agent model<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/eee/ecolet/v68y2000i1p67-77.html}
}

@Article{Carroll2001,
  author = {Christopher D. Carroll},
  title = {A Theory of the Consumption Function, with and without Liquidity Constraints},
  journal = {Journal of Economic Perspectives},
  year = 2001,
  volume = {15},
  number = {3},
  pages = {23-45},
  month = {Summer},
  keywords = {},
  abstract = {This paper argues that the modern stochastic consumption model, in which impatient consumers face uninsurable labor income risk, matches Milton Friedman's (1957) original description of the Permanent Income Hypothesis much better than the perfect foresight or certainty equivalent models did. The model can explain the high marginal propensity to consume, the high discount rate on future income, and the important role for precautionary behavior that were all part of Friedman's original framework. The paper also explains the relationship of these questions to the Euler equation literature, and argues that the effects of precautionary saving and liquidity constraints are often virtually indistinguishable.},
  url = {http://ideas.repec.org/a/aea/jecper/v15y2001i3p23-45.html}
}

@TechReport{Carroll2012,
  author = {Christopher D. Carroll},
  title = {Implications of Wealth Heterogeneity For Macroeconomics},
  year = 2012,
  month = May,
  institution = {The Johns Hopkins University,Department of Economics},
  type = {Economics Working Paper Archive},
  url = {http://ideas.repec.org/p/jhu/papers/597.html},
  number = {597},
  abstract = {Today�s dominant strain of macroeconomic models supposes that aggregate consumption can be understood by assuming the existence of a �representative agent� whose behavior rationalizes observed outcomes. But representative agent models yield embarrassingly implausible (and empirically inaccurate) descriptions of consumption behavior. When push comes to shove, real-world forecasters (including those at the Fed) properly disregard these implications. As a result, consumption forecasting remains very much a seat-of-the-pants enterprise. I will argue that if the representative agent assumption is replaced with a model that generates wealth heterogeneity that matches the empirical data, the improved model can provide a sensible analysis of economic questions like \&quot;What might the consumption response be to economic stimulus payments?\&quot;},
  keywords = {}
}


@TechReport{CarrollSlacalekTokuoka2014,
  author={Carroll, Christopher D. and Slacalek, Jiri and Tokuoka, Kiichi},
  title={{Buffer-stock saving in a Krusell-Smith world}},
  year=2014,
  month=Feb,
  institution={European Central Bank},
  type={Working Paper Series},
  url={http://ideas.repec.org/p/ecb/ecbwps/20141633.html},
  number={1633},
  abstract={A large body of microeconomic evidence supports Friedman (1957)'s proposition that household income can be reasonably well described as having both transitory and permanent components. We show how to modify the widely-used macroeconomic model of Krusell and Smith (1998) to accommodate such a microeconomic income process. Our incorporation of substantial permanent income shocks helps our model to explain a substantial part of the large degree of empirical wealth heterogeneity that is unexplained in the baseline Krusell and Smith (1998) model, even without heterogeneity in preferences. JEL Classification: D12, D31, D91, E21},
  keywords={aggregate uncertainty; household income process; wealth inequality},
}


@Article{CarrollSlacalekTokuoka2014AER,
  author={Christopher D. Carroll and Jiri Slacalek and Kiichi Tokuoka},
  title={{The Distribution of Wealth and the MPC: Implications of New European Data}},
  journal={American Economic Review},
  year=2014,
  volume={104},
  number={5},
  pages={107-11},
  month={May},
  keywords={},
  abstract={Using a standard, realistically calibrated model of buffer-stock saving with transitory and permanent income shocks, we study how cross-country differences in the wealth distribution and household income dynamics affect the marginal propensity to consume out of transitory shocks (MPC). Across the 15 countries in our sample, we find that the aggregate consumption response ranges between 0.1 and 0.4 and is stronger (i) in economies with large wealth inequality, where a larger proportion of households has little wealth, (ii) under larger transitory income shocks, and (iii) when we consider households only use liquid assets (rather than net wealth) to smooth consumption.},
  url={http://ideas.repec.org/a/aea/aecrev/v104y2014i5p107-11.html}
}





@Article{CastanedaRiosRull2003,
  author = {Ana Castaneda and Javier Diaz-Gimenez and Jose-Victor Rios-Rull},
  title = {Accounting for the U.S. Earnings and Wealth Inequality},
  journal = {Journal of Political Economy},
  year = 2003,
  volume = {111},
  number = {4},
  pages = {818-857},
  month = {August},
  keywords = {},
  abstract = {We show that a theory of earnings and wealth inequality, based on the optimal choices of ex ante identical households that face uninsured idiosyncratic shocks to their endowments of efficiency labor units, accounts for the U.S. earnings and wealth inequality almost exactly.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v111y2003i4p818-857.html}
}


@TechReport{CGS2007,
  author = {Matthew Chambers and Carlos Garriga and Don Schlagenhauf},
  title = {Mortgage contracts and housing tenure decisions},
  year = 2007,
  institution = {Federal Reserve Bank of St. Louis},
  type = {Working Papers},
  url = {http://ideas.repec.org/p/fip/fedlwp/2007-040.html},
  number = {2007-040},
  abstract = {In this paper, we analyze various mortgage contracts and their implications for housing tenure and investment decisions using a model with heterogeneous consumers and liquidity constraints. We find that different types of mortgage contracts influence these decisions through three dimensions: the downpayment constraint, the payment schedule, and the amortization schedule. Contracts with lower downpayment requirements allow younger and lower income households to enter the housing market earlier. Mortgage contracts with increasing payment schedules increase the participation of first-time buyers, but can generate lower homeownership later in the life cycle. We find that adjusting the amortization schedule of a contract can be important. Mortgage contracts which allow the quick accumulation of home equity increase homeownership across the entire life cycle.},
  keywords = {Housing - Finance ; Mortgage loans}
}

@Article{ChangKim2006,
  author = {Yongsung Chang and Sun-Bin Kim},
  title = {From Individual To Aggregate Labor Supply: A Quantitative Analysis Based On A Heterogeneous Agent Macroeconomy },
  journal = {International Economic Review},
  year = 2006,
  volume = {47},
  number = {1},
  pages = {1-27},
  month = {02},
  keywords = {},
  abstract = { At the aggregate level, the labor-supply elasticity depends on the reservation-wage distribution. We present a model economy where workforce heterogeneity stems from idiosyncratic productivity shocks. The model economy exhibits the cross-sectional earnings and wealth distributions that are comparable to those in the micro data. We find that the aggregate labor-supply elasticity of such an economy is around 1, greater than a typical micro estimate. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.},
  url = {http://ideas.repec.org/a/ier/iecrev/v47y2006i1p1-27.html}
}

@Article{ChettySzeidl2007,
  author = {Raj Chetty and Adam Szeidl},
  title = {Consumption Commitments and Risk Preferences},
  journal = {The Quarterly Journal of Economics},
  year = 2007,
  volume = {122},
  number = {2},
  pages = {831-877},
  month = {05},
  keywords = {},
  abstract = { Many households devote a large fraction of their budgets to \&quot;consumption commitments\&quot;-goods that involve transaction costs and are infrequently adjusted. This paper characterizes risk preferences in an expected utility model with commitments. We show that commitments affect risk preferences in two ways: (1) they amplify risk aversion with respect to moderate-stake shocks, and (2) they create a motive to take large-payoff gambles. The model thus helps resolve two basic puzzles in expected utility theory: the discrepancy between moderate-stake and large-stake risk aversion and lottery playing by insurance buyers. We discuss applications of the model such as the optimal design of social insurance and tax policies, added worker effects in labor supply, and portfolio choice. Using event studies of unemployment shocks, we document evidence consistent with the consumption adjustment patterns implied by the model. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.},
  url = {http://ideas.repec.org/a/tpr/qjecon/v122y2007i2p831-877.html}
}


@Article{CutlerKatz1991,
  author = {David M. Cutler and Lawrence F. Katz},
  title = {Macroeconomic Performance and the Disadvantaged},
  journal = {Brookings Papers on Economic Activity},
  year = 1991,
  volume = {22},
  number = {2},
  pages = {1-74},
  month = {},
  keywords = {macroeconomics},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/bin/bpeajo/v22y1991i1991-2p1-74.html}
}

@Article{CutlerKatz1992,
  author = {Cutler, David M and Katz, Lawrence F},
  title = {Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980's},
  journal = {American Economic Review},
  year = 1992,
  volume = {82},
  number = {2},
  pages = {546-51},
  month = {May},
  keywords = {},
  abstract = {This paper examines changes in the distribution of income and consumption in the United States during the 1980s. using data from the Current Population Survey (income) and Consumer Expenditure Survey (consumption). We reach three primary conclusions. First. changes in the distribution of consumption parallel changes in the distribution of income. The lowest quintile of the consumption distribution received 0.9 percentage points less of total consumption in 1988 than in 1980; the corresponding decline for income was 0.6 percentage points. Second. broad conclusions concerning recent changes in the consumption distribution are not very sensitive to the exact choice of a measure of family needs. Under a wide variety of alternative household equivalence scales. there is a widening in the consumption distribution in the 1980s. Third. the usc of consumption measures of well-being in place of measures based on current money income docs change conclusions concerning the extent of poverty in the United Stales. Using the official federal poverty thresholds. we find that the overall consumption poverty rate was three percentage points below the income poverty rate in 1988. Comparisons of the poverty rates of the elderly and the non-elderly are substantially affected by the choice of poverty measure. The consumption poverty rare for the elderly was only 60 percent of the rate for adults and one-third of the rate for children in 1988.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/aea/aecrev/v82y1992i2p546-51.html}
}


@Article{ColeKocherlakota2001,
  author = {Cole, Harold L and Kocherlakota, Narayana R},
  title = {Efficient Allocations with Hidden Income and Hidden Storage},
  journal = {Review of Economic Studies},
  year = 2001,
  volume = {68},
  number = {3},
  pages = {523-42},
  month = {July},
  keywords = {},
  abstract = { We consider an environment in which individuals receive income shocks that are unobservable to others and can privately store resources. We provide a simple characterization of the unique efficient allocation of consumption in cases in which the rate of return on storage is sufficiently high or, alternatively, in which the worst possible outcome is sufficiently dire. We show that, unlike in environments without unobservable storage, the symmetric efficient allocation of consumption is decentralizable through a competitive asset market in which individuals trade risk-free bonds among themselves. Copyright 2001 by The Review of Economic Studies Limited},
  url = {http://ideas.repec.org/a/bla/restud/v68y2001i3p523-42.html}
}

@TechReport{CampbellHercovitz2004,
  author = {Jeffrey R. Campbell and Zvi Hercowitz},
  title = {The role of households' collateralized debts in macroeconomic stabilization},
  year = 2004,
  month = {},
  institution = {Federal Reserve Bank of Chicago},
  type = {Working Paper Series},
  url = {http://ideas.repec.org/p/fip/fedhwp/wp-04-24.html},
  number = {WP-04-24},
  abstract = {Market innovations following the financial reforms of the early 1980's relaxed collateral constraints on households' borrowing. This paper examines the implications of this development for macroeconomic volatility. We combine collateral constraints on households with heterogeneity of thrift in a calibrated general equilibrium model, and we use this tool to characterize the business cycle implications of realistically lowering minimum down payments and rates of amortization for durable goods purchases. The model predicts that this relaxation of collateral constraints can explain a large fraction of the volatility decline in hours worked, output, household debt, and household durable goods purchases.},
  keywords = {Households - Economic aspects ; Macroeconomics ; Labor supply}
}

@TechReport{CampbellHercovitz2005,
  author = {Jeffrey R. Campbell and Zvi Hercowitz},
  title = {The Role of Collateralized Household Debt in Macroeconomic Stabilization},
  year = 2005,
  month = May,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/11330.html},
  number = {11330},
  abstract = {Market innovations following the financial reforms of the early 1980s relaxed collateral constraints on household borrowing. The present paper examines the contribution of this development to the macroeconomic stabilization that occurred shortly thereafter. The model combines collateral constraints on households with heterogeneity of thrift in a calibrated general equilibrium setup. We use this tool to characterize the business cycle implications of lowering required down payments and rates of amortization for durable goods purchases as in the early 1980s. The model predicts that this relaxation of collateral constraints can explain a large fraction of the actual volatility decline in hours worked, output, household debt, and household durable goods purchases.},
  keywords = {}
}

@Article{CampbellHercovitz2009,
  author = {Campbell, Jeffrey R. and Hercowitz, Zvi},
  title = {Welfare implications of the transition to high household debt},
  journal = {Journal of Monetary Economics},
  year = 2009,
  volume = {56},
  number = {1},
  pages = {1-16},
  month = {January},
  keywords = { Financial deregulation Mortgage debt Interest rates},
  abstract = {Aggressive deregulation of the mortgage market in the early 1980s triggered innovations that greatly reduced indebted households' required home equity, and a borrowing surge followed. This paper uses a calibrated general equilibrium model of lending from the wealthy to the middle class to evaluate the welfare effects of this reform quantitatively. We find that the \&quot;indirect\&quot; effects of endogenous interest rate and other relative price changes dominate the \&quot;direct\&quot; effect of relaxing the constraint. The borrowing household's welfare falls even though the reform directly relaxes a constraint on its trade. The saving household's welfare rises substantially.},
  url = {http://ideas.repec.org/a/eee/moneco/v56y2009i1p1-16.html}
}

@Article{CampbellCochrane1999,
  author = {John Y. Campbell and John Cochrane},
  title = {Force of Habit: A Consumption-Based Explanation of Aggregate Stock Market Behavior},
  journal = {Journal of Political Economy},
  year = 1999,
  volume = {107},
  number = {2},
  pages = {205-251},
  month = {April},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v107y1999i2p205-251.html}
}





@Article{ChenLudvigson2009,
  author = {Xiaohong Chen and Sydney C. Ludvigson},
  title = {Land of addicts? an empirical investigation of habit-based asset pricing models},
  journal = {Journal of Applied Econometrics},
  year = 2009,
  volume = {24},
  number = {7},
  pages = {1057-1093},
  month = {},
  keywords = {},
  abstract = { This paper studies the ability of a general class of habit-based asset pricing models to match the conditional moment restrictions implied by asset pricing theory. We treat the functional form of the habit as unknown, and estimate it along with the rest of the model's finite dimensional parameters. Using quarterly data on consumption growth, assets returns and instruments, our empirical results indicate that the estimated habit function is nonlinear, that habit formation is better described as internal rather than external, and the estimated time-preference parameter and the power utility parameter are sensible. In addition, the estimated habit function generates a positive stochastic discount factor (SDF) proxy and performs well in explaining cross-sectional stock return data. We find that an internal habit SDF proxy can explain a cross-section of size and book-market sorted portfolio equity returns better than (i) the Fama and French (1993) three-factor model, (ii) the Lettau and Ludvigson (2001b) scaled consumption CAPM model, (iii) an external habit SDF proxy, (iv) the classic CAPM, and (v) the classic consumption CAPM. Copyright � 2009 John Wiley \& Sons, Ltd.},
  url = {http://ideas.repec.org/a/jae/japmet/v24y2009i7p1057-1093.html}
}


@TechReport{ChangHongKarabarbounis2015,
  author = {Yongsung Chang and Jay Hong and Marios Karabarbounis},
  title = {Life Cycle Uncertainty and Portfolio Choice Puzzles},
  year = 2013,
  institution = {Society for Economic Dynamics},
  type = {2013 Meeting Papers},
  url = {http://ideas.repec.org/p/red/sed013/595.html},
  number = {595},
  abstract = {The standard theory of household portfolio choice is hard to reconcile with the following facts. (i) Despite a high rate of returns the average household holds a low share of risky assets (equity premium puzzle). (ii) The share of risky assets increases in age. (iii) The share of risky assets is disproportionately larger for richer households. We show that a simple life-cycle model with learning about earnings ability can successfully address all three puzzles. Young workers, on average asset poor, face larger uncertainty in their life-time labor income because they do have perfect knowledge of their ability in the market. They hedge this risk in human capital by investing in relatively safe financial assets. As earnings ability is gradually revealed over time, they take more risk in financial investment. When the labor income risks are calibrated to those observed in the Panel Study of Income Dynamics, our model with learning reproduces the investment profile we see in the Survey of Consumer Finances.},
  keywords = {}
}


@Article{ChamonPrasad2010,
  author = {Marcos D. Chamon and Eswar S. Prasad},
  title = {Why Are Saving Rates of Urban Households in China Rising?},
  journal = {American Economic Journal: Macroeconomics},
  year = 2010,
  volume = {2},
  number = {1},
  pages = {93-130},
  month = {January},
  keywords = {},
  abstract = {From 1995 to 2005, the average urban household savings rate in China rose by 7 percentage points, to about one-quarter of disposable income. Savings rates increased across all demographic groups, and the age profile of savings has an unusual pattern in recent years, with younger and older households having relatively high savings rates. We argue that these patterns are best explained by the rising private burden of expenditures on housing, education, and health care. These effects and precautionary motives may have been amplified by financial underdevelopment, including constraints on borrowing against future income and low returns on financial assets. (JEL D14, E21, O12, O18, P25, P36)},
  url = {http://ideas.repec.org/a/aea/aejmac/v2y2010i1p93-130.html}
}


@InCollection{CLMM2004,
  author = {James J. Choi and David Laibson and Brigitte C. Madrian and Andrew Metrick},
  title = {For Better or for Worse: Default Effects and 401(k) Savings Behavior},
  booktitle = {Perspectives on the Economics of Aging},
  publisher = {National Bureau of Economic Research, Inc},
  year = 2004,
  month = {},
  volume = {},
  number = {},
  series = {NBER Chapters},
  edition = {},
  chapter = {},
  pages = {81-126},
  keywords = {},
  abstract = {In the last several years, many employers have decided to automatically enroll their new employees in the company 401(k) plan. Using several years of administrative data from three large firms, we analyze the impact of automatic enrollment on 401(k) participation rates, savings behavior, and asset accumulation. We find that although employees can opt out of the 401(k) plan, few choose to do so. As a result, automatic enrollment has a dramatic impact on retirement savings behavior: 401(k) participation rates at all three firms exceed 85\%, but participants tend to anchor at a low default savings rate and in a conservative default investment vehicle. We find that initially, about 80\% of participants accept both the default savings rate (2\% or 3\% for our three companies) and the default investment fund (a stable value or money market fund). Even after three years, half of the plan participants subject to automatic enrollment continue to contribute at the default rate and invest their contributions exclusively in the default fund. The effects of automatic enrollment on asset accumulation are not the default fund. The effects of automatic enrollment on asset accumulation are not savings rate and the conservative default investment fund undercut accumulation. In our sample, these two effects are roughly offsetting on average. However, automatic enrollment does increase saving in the lower tail of the savings distribution by dramatically reducing the fraction of employees who do not participate in the 401(k) plan.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/h/nbr/nberch/10341.html}
}



@Article{Cordoba2008,
  author = {Cordoba, Juan-Carlos},
  title = {U.S. inequality: Debt constraints or incomplete asset markets?},
  journal = {Journal of Monetary Economics},
  year = 2008,
  volume = {55},
  number = {2},
  pages = {350-364},
  month = {March},
  keywords = {},
  abstract = {To examine the role of debt constraints and incomplete asset markets (lack of insurance markets) in explaining U.S. inequality, we run horse races between competing models. For a widely used model, we decompose inequality into its fundamental driving forces. The underlying source of inequality in all models is uninsurable idiosyncratic risk. Both debt constraints and incomplete asset markets are needed to account for inequality, but asset market incompleteness is the key friction. It better accounts for the concentration and dispersion of wealth, and is the most costly friction in terms of welfare. Tight debt constraints are important for explaining the lower tail of the wealth distribution.},
  url = {http://ideas.repec.org/a/eee/moneco/v55y2008i2p350-364.html}
}


@TechReport{Cowelletal2012,
  author={Frank A Cowell and Eleni Karagiannaki and Abigail McKnight},
  title={{Mapping and measuring the distribution of household wealth: A cross-country analysis}},
  year=2012,
  month=Nov,
  institution={Centre for Analysis of Social Exclusion, LSE},
  type={CASE Papers},
  url={http://ideas.repec.org/p/cep/sticas/-165.html},
  number={/165},
  keywords={household wealth; wealth inequality; debt; housing assets; educational loans; age-wealth profiles; d},
}


@TechReport{Cowelletal2013,
  author={Frank A Cowell and Eleni Karagiannaki and Abigail McKnight},
  title={{Accounting for cross-country differences in wealth inequality}},
  year=2013,
  month=Mar,
  institution={Centre for Analysis of Social Exclusion, LSE},
  type={CASE Papers},
  url={http://ideas.repec.org/p/cep/sticas/-168.html},
  number={/168},
  abstract={This paper adopts a counterfactual decomposition analysis to analyse cross-country differences in the size of household wealth and levels of household wealth inequality. The findings of the paper suggest that the biggest share of cross-country differences is not due to differences in the distribution of household demographic and economic characteristics but rather reflect strong unobserved country effects.},
  keywords={household wealth; wealth inequality; debt; housing assets; educational loans; age-wealth profiles; d},
}

@TechReport{Cozzi2014,
  author={Marco Cozzi},
  title={{Risk Aversion Heterogeneity, Risky Jobs and Wealth Inequality}},
  year=2014,
  month=Dec,
  institution={Queen's University, Department of Economics},
  type={Working Papers},
  url={http://ideas.repec.org/p/qed/wpaper/1286.html},
  number={1286},
  abstract={This paper considers the macroeconomic implications of a set of empirical studies finding a high degree of dispersion in preferences for risk. It develops a model with risk aversion heterogeneity, uninsurable idiosyncratic income risk, and (with or without) self-selection into risky jobs to quantify their effects on the distribution of wealth. The results show that the role of risk aversion heterogeneity is quantitatively important. When estimating the risk aversion distribution with the appropriate PSID data on income lotteries, the model matches the observed degree of wealth inequality in the U.S., accounting for both the wealth Gini index and other key features of the wealth distribution. It is also shown that neglecting risk preference heterogeneity has a first order effect on the aggregate allocations.},
  keywords={Wealth Inequality; Heterogeneous Agents; Incomplete Markets; Computable General Equilibrium},
}




@Techreport{CynamonFazzari2013a,
  author = {Cynamon, Barry Z. and Fazzari, Steven M.},
  title = {Inequality, the Great Recession, and Slow Recovery},
  year = {2013},
  month = {December},
  type = {SSRN Working Paper}
}

@TechReport{CynamonFazzari2013b,
  author = {Cynamon, Barry Z. and Fazzari, Steven M.},
  title = {Inequality and Household Finance during the Consumer Age},
  year = {2013},
  institution = {The Levy Economics Institute},
  type = {Economics Working Paper Archive},
  number = {752}
}


@Article{DavisKahn2008,
  author = {Steven J. Davis and James A. Kahn},
  title = {Interpreting the Great Moderation: Changes in the Volatility of Economic Activity at the Macro and Micro Levels},
  journal = {Journal of Economic Perspectives},
  year = 2008,
  volume = {22},
  number = {4},
  pages = {155-80},
  month = {Fall},
  keywords = {},
  abstract = {Most advanced economies have experienced a striking decline in the volatility of aggregate economic activity since the early 1980s. Volatility reductions are evident for output and employment at the aggregate level and across most industrial sectors and expenditure categories. Inflation and inflation volatility have also declined dramatically. Previous studies offer several potential explanations for this \&quot;Great Moderation.\&quot; We review evidence on the Great Moderation in conjunction with evidence about volatility trends at the micro level. We combine the two types of evidence to develop a tentative story for important components of the aggregate volatility decline and its consequences. The key ingredients are declines in firm-level volatility and aggregate volatility -- most dramatically in the durable goods sector. Surprisingly, this has occurred without a decline in household consumption volatility and individual earnings uncertainty. Our explanation for the aggregate volatility decline stresses improved supply-chain management, particularly in the durable goods sector, and, less important, a shift in production and employment from goods to services. We provide evidence that better inventory control made a substantial contribution to declines in firm-level and aggregate volatility. Consistent with this view, if we look past the turbulent 1970s and early 1980s much of the moderation reflects a decline in high frequency (short-term) fluctuations. While these developments represent efficiency gains, they do not imply (nor is there evidence for) a reduction in economic uncertainty faced by individuals and households.},
  url = {http://ideas.repec.org/a/aea/jecper/v22y2008i4p155-80.html}
}


@TechReport{DaviesSandstormShorrocksWolff2007,
  author={Davies, James B. and Sandstrom, Susanna and Shorrocks, Anthony and Wolff, Edward N.},
  title={{Estimating the Level and Distribution of Global Household Wealth}},
  year=2007,
  institution={World Institute for Development Economic Research (UNU-WIDER)},
  type={Working Paper Series},
  url={http://ideas.repec.org/p/unu/wpaper/rp2007-77.html},
  number={UNU-WIDER Research Paper },
  abstract={We provide the first estimate of the level and distribution of global household wealth. Mean assets and debts within countries are measured, partly or wholly, for 38 countries using household balance sheet and survey data centred on the year 2000. Determinants of mean financial assets, non-financial assets, and liabilities are studied empirically, and the results are used to impute values to countries lacking wealth data. Household wealth per adult is US$43,494 in PPP terms, and ranges regionally from US$11,655 in Africa to US$193,147 in North America. Data on the shape of the household distribution of wealth for 20 countries, accounting for 59 per cent of the world?s population and, we estimate, 84 per cent of its wealth are used to establish patterns of wealth inequality within countries. Imputations are again performed for countries lacking wealth data, on the basis of the observed relation between wealth and income distribution for the 20 countries with data. The Gini coefficient for the global distribution of wealth is 0.804, and the share of the top 10 per cent is 71 per cent. Wealth of US$8,325 is needed to be in the top half of the distribution, and US$517,601 is needed to be in the top one per cent. Between-country differences in wealth are two-thirds of global inequality according to the Gini coefficient, indicating a larger role for within-country inequality than in the case of income according to recent estimates.},
  keywords={wealth; net worth; personal assets; inequality; households; portfolios; balance sheets},
}



@Article{Deaton1991,
  author = {Deaton, Angus},
  title = {Saving and Liquidity Constraints},
  journal = {Econometrica},
  year = 1991,
  volume = {59},
  number = {5},
  pages = {1221-48},
  month = {September},
  keywords = {},
  abstract = { This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of such a theory to account for some of the stylized facts of saving behavior. The models presented in the paper seem to account for important aspects of reality that are not explained by traditional life-cycle models. Copyright 1991 by The Econometric Society.},
  url = {http://ideas.repec.org/a/ecm/emetrp/v59y1991i5p1221-48.html}
}


@Article{Deaton1992,
  author = {Deaton, Angus},
  title = {Saving and Liquidity Constraints},
  journal = {Econometrica},
  year = 1991,
  volume = {59},
  number = {5},
  pages = {1221-48},
  month = {September},
  keywords = {},
  abstract = { This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of such a theory to account for some of the stylized facts of saving behavior. The models presented in the paper seem to account for important aspects of reality that are not explained by traditional life-cycle models. Copyright 1991 by The Econometric Society.},
  url = {http://ideas.repec.org/a/ecm/emetrp/v59y1991i5p1221-48.html}
}

@Book{Deaton1992book,
  author = {Deaton, Angus},
  title = {Understanding Consumption},
  publisher = {Oxford University Press},
  year = 1992,
  month = {},
  volume = {},
  number = {9780198288244},
  series = {OUP Catalogue},
  edition = {},
  keywords = {},
  abstract = {This book provides an overview of the recent research on saving and consumption, a field in which substantial progress has been made over the last decade. Attempts by economists to understand saving and consumption patterns have generated some of the best science in economics. For more than fifty years, there has been serious empirical and theoretical activity, and data, theory, and policy have never been separated as has happened in many branches of economics. Research has drawn microeconomists interested in household behaviour, as well as macroeconomists, for whom the behaviour of aggregate consumption has always occupied a central role in explaining aggregate fluctuations. Econometricians have also made distinguished contributions, and there has been a steady flow of new methodologies by those working on saving and consumption, in time-series econometrics, as well as in the study of micro and panel data. A coherent account of these developments is presented here, emphasizing the interplay between micro and the macro, between studies of cross-section and panels, and those using aggregate time series data.}
}

@Article{DeatonPaxson1994,
  author = {Deaton, Angus and Paxson, Christina},
  title = {Intertemporal Choice and Inequality},
  journal = {Journal of Political Economy},
  year = 1994,
  volume = {102},
  number = {3},
  pages = {437-67},
  month = {June},
  keywords = {},
  abstract = { The permanent income hypothesis implies that, for any cohort of people, inequality in consumption and income should grow with age, a prediction that is here confirmed using data from eleven years of household survey data from the United States, twenty-two years from Great Britain, and fourteen years from Taiwan. In the permanent income hypothesis, the increase in inequality reflects the cumulative effect of luck on consumption. Other models of intertemporal choice--such as those with strong precautionary motives or liquidity constraints--can limit or even prevent the spread of inequality, as can insurance arrangements that share risk across individuals. Copyright 1994 by University of Chicago Press.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v102y1994i3p437-67.html}
}


@TechReport{Debelle2004,
  author={Guy Debelle},
  title={{Macroeconomic implications of rising household debt}},
  year=2004,
  month=Jun,
  institution={Bank for International Settlements},
  type={BIS Working Papers},
  url={http://ideas.repec.org/p/bis/biswps/153.html},
  number={153},
  abstract={Household borrowing has grown considerably in many countries over the past two decades, both in absolute terms and relative to household incomes. Much of the increase can be viewed as a rational response by households to the effects of easing liquidity constraints on households, and lower inflation and borrowing rates. Regardless of whether the increase in debt is sustainable, it has important macroeconomic implications. The household sector will be more sensitive to shocks to interest rates and household incomes, and consumption spending will be more sensitive to changes in expectations of future income. The increased sensitivity will depend crucially on the distribution of debt across the household sector.},
  keywords={Macroeconomic implications of rising household debt},
}

@Article{DeNardi2004,
  author={Mariacristina DeNardi},
  title={{Wealth Inequality and Intergenerational Links}},
  journal={Review of Economic Studies},
  year=2004,
  volume={71},
  number={},
  pages={743-768},
  month={07},
  keywords={},
  abstract={ Previous work has had difficulty generating household saving behaviour that makes the distribution of wealth much more concentrated than that of labour earnings, and that makes the richest households hold onto large amounts of wealth, even during very old age. I construct a quantitative, general equilibrium, overlapping-generations model in which parents and children are linked by accidental and voluntary bequests and by earnings ability. I show that voluntary bequests can explain the emergence of large estates, while accidental bequests alone cannot, and that adding earnings persistence within families increases wealth concentration even more. I also show that the introduction of a bequest motive generates lifetime savings profiles more consistent with the data. Copyright 2004 The Review of Economic Studies Ltd.},
  url={http://ideas.repec.org/a/bla/restud/v71y2004ip743-768.html}
}




@TechReport{DeNardi2015,
  author={Mariacristina DeNardi},
  title={{Quantitative Models of Wealth Inequality: A Survey}},
  year=2015,
  month=Apr,
  institution={National Bureau of Economic Research, Inc},
  type={NBER Working Papers},
  url={http://ideas.repec.org/p/nbr/nberwo/21106.html},
  number={21106},
  abstract={While in the data wealth is concentrated in the hands of a small number of rich people and the saving rate of the rich is high, many models used for quantitative policy evaluation fail to match these facts. In addition, some of the models that succeed in matching these facts have radically different policy implications, depending on the nature and strength of the saving motives assumed. This paper surveys the savings mechanisms proposed so far (preference heterogeneity, transmission of bequests and human capital across generations, entrepreneurship, and high earnings risk for the top earners) and argues that more work is needed to understand wealth inequality and the saving motives behind it, and to evaluate policy more reliably.},
  keywords={},
}

@TechReport{DeNardiFrenchJonesMcCauley2015,
  author={Mariacristina DeNardi and Eric French and John Bailey Jones and Jeremy McCauley},
  title={{Medical Spending of the U.S. Elderly}},
  year=2015,
  month=Jun,
  institution={National Bureau of Economic Research, Inc},
  type={NBER Working Papers},
  url={http://ideas.repec.org/p/nbr/nberwo/21270.html},
  number={21270},
  abstract={We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 and that they are very concentrated: the top 10\% of all spenders are responsible for 52\% of medical spending in a given year. In addition, those currently experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We also find that the poor consume more medical goods and services than the rich and have a much larger share of their expenses covered by the government. Overall, the government pays for 65\% of the elderly's medical expenses. Despite this, the expenses that remain after government transfers are even more concentrated among a small group of people. Thus, government health insurance, while potentially very valuable, is far from complete. Finally, while medical expenses before death can be large, on average they constitute only a small fraction of total spending, both in the aggregate and over the life cycle. Hence, medical expenses before death do not appear to be an important driver of the high and increasing medical spending found in the U.S.},
  keywords={},
}

@Article{DeNardiFrenchJones2010,
  author={Mariacristina DeNardi and Eric French and John B. Jones},
  title={{Why Do the Elderly Save? The Role of Medical Expenses}},
  journal={Journal of Political Economy},
  year=2010,
  volume={118},
  number={1},
  pages={39-75},
  month={02},
  keywords={},
  abstract={ This paper constructs a model of saving for retired single people that includes heterogeneity in medical expenses and life expectancies, and bequest motives. We estimate the model using Assets and Health Dynamics of the Oldest Old data and the method of simulated moments. Out-of-pocket medical expenses rise quickly with age and permanent income. The risk of living long and requiring expensive medical care is a key driver of saving for many higher-income elderly. Social insurance programs such as Medicaid rationalize the low asset holdings of the poorest but also benefit the rich by insuring them against high medical expenses at the ends of their lives. (c) 2010 by The University of Chicago. All rights reserved..},
  url={http://ideas.repec.org/a/ucp/jpolec/v118y2010i1p39-75.html}
}




@Article{DeNardiFrenchJones2009,
  author={Mariacristina DeNardi and Eric French and John Bailey Jones},
  title={{Life Expectancy and Old Age Savings}},
  journal={American Economic Review},
  year=2009,
  volume={99},
  number={2},
  pages={110-15},
  month={May},
  keywords={},
  abstract={Rich people, women, and healthy people live longer. We document that this heterogeneity in life expectancy is large. We use an estimated structural model to assess the impact of life expectancy variation on the elderly’s savings. We find that the differences in life expectancy related to observable factors such as health, gender, and income have large effects on savings, and that these factors contribute by similar amounts. We also show that the risk of outliving one’s expected lifespan has a large effect on the elderly’s saving behavior.<P>(This abstract was borrowed from another version of this item.)},
  url={http://ideas.repec.org/a/aea/aecrev/v99y2009i2p110-15.html}
}




@TechReport{DeNardiYang2015,
  author = {DeNardi, Mariacristina and Yang, Fang},
  title = {Wealth Inequality, Family Background, and Estate Taxation},
  year = 2015,
  month = {March},
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  number = {21047},
}

@Article{DHPRV2013,
  author = {Jason DeBacker and Bradley Heim and Vasia Panousi and Shanthi Ramnath and Ivan Vidangos},
  title = {Rising Inequality: Transitory or Persistent? New Evidence from a Panel of U.S. Tax Returns},
  journal = {Brookings Papers on Economic Activity},
  year = 2013,
  volume = {46},
  number = {1 (Spring)},
  pages = {67-142},
  month = {},
  keywords = {inequality; tax returns; labor; income; taxes},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/bin/bpeajo/v46y2013i2013-01p67-142.html}
}

@Article{DellaVigna2009,
  author = {Stefano DellaVigna},
  title = {Psychology and Economics: Evidence from the Field},
  journal = {Journal of Economic Literature},
  year = 2009,
  volume = {47},
  number = {2},
  pages = {315-72},
  month = {June},
  keywords = {},
  abstract = {The research in Psychology and Economics (a.k.a. Behavioral Economics) suggests that individuals deviate from the standard model in three respects: (1) nonstandard preferences, (2) nonstandard beliefs, and (3) nonstandard decision making. In this paper, I survey the empirical evidence from the field on these three classes of deviations. The evidence covers a number of applications, from consumption to finance, from crime to voting, from charitable giving to labor supply. In the class of nonstandard preferences, I discuss time preferences (self-control problems), risk preferences (reference dependence), and social preferences. On nonstandard beliefs, I present evidence on overconfidence, on the law of small numbers, and on projection bias. Regarding nonstandard decision making, I cover framing, limited attention, menu effects, persuasion and social pressure, and emotions. I also present evidence on how rational actors -- firms, employers, CEOs, investors, and politicians -- respond to the nonstandard behavior described in the survey. Finally, I briefly discuss under what conditions experience and market interactions limit the impact of the nonstandard features.},
  url = {http://ideas.repec.org/a/aea/jeclit/v47y2009i2p315-72.html}
}

@Article{DPMRR2003,
  author = {Diaz, Antonia and Pijoan-Mas, Josep and Rios-Rull, Jose-Victor},
  title = {Precautionary savings and wealth distribution under habit formation preferences},
  journal = {Journal of Monetary Economics},
  year = 2003,
  volume = {50},
  number = {6},
  pages = {1257-1291},
  month = {September},
  keywords = {},
  abstract = {In this paper we study the role of habit formation in shaping the wealth distribution in an otherwise standard heterogeneous agents model economy with idiosyncratic uncertainty. We compare the inplications for precautionary savings and for wealth concentration between economies that only differ in the role played by habit formation. Once preferences are properly adjusted so that the Intertemporal Elasticity of Substituion is the same in all model economies studied, we find that habit formation brings a hefty increase in precautionary savings and very mild reductions in the coefficient of variation and in the Gini index of wealth. We also find that the reductions in these measures of inequality also hold when we adjust our economy so that aggregate savings are the same as in the economy without habit formation. These findings hold for both persistent and non persistent habits although for the former the quantitative size of the effects is much larger. We conclude that habit formation, while being a mechanism that increases the amount of precautionary savings generated in a model, does not change the implications for wealth inequality that arise from standard models.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/eee/moneco/v50y2003i6p1257-1291.html}
}

@Article{DiamondSaez2011,
  author={Peter Diamond and Emmanuel Saez},
  title={{The Case for a Progressive Tax: From Basic Research to Policy Recommendations}},
  journal={Journal of Economic Perspectives},
  year=2011,
  volume={25},
  number={4},
  pages={165-90},
  month={Fall},
  keywords={},
  abstract={This paper presents the case for tax progressivity based on recent results in optimal tax theory. We consider the optimal progressivity of earnings taxation and whether capital income should be taxed. We critically discuss the academic research on these topics and when and how the results can be used for policy recommendations. We argue that a result from basic research is relevant for policy only if 1) it is based on economic mechanisms that are empirically relevant and first order to the problem, 2) it is reasonably robust to changes in the modeling assumptions, and 3) the policy prescription is implementable (i.e, is socially acceptable and not too complex). We obtain three policy recommendations from basic research that satisfy these criteria reasonably well. First, very high earners should be subject to high and rising marginal tax rates on earnings. Second, low-income families should be encouraged to work with earnings subsidies, which should then be phased-out with high implicit marginal tax rates. Third, capital income should be taxed. We explain why the famous zero marginal tax rate result for the top earner in the Mirrlees model and the zero capital income tax rate results of Chamley and Judd, and Atkinson and Stiglitz are not policy relevant in our view.},
  url={http://ideas.repec.org/a/aea/jecper/v25y2011i4p165-90.html}
}

@Article{DiNardoFortinLemieux1996,
  author={DiNardo, John and Fortin, Nicole M and Lemieux, Thomas},
  title={{Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach}},
  journal={Econometrica},
  year=1996,
  volume={64},
  number={5},
  pages={1001-44},
  month={September},
  keywords={},
  abstract={ This paper provides evidence that the decline in the real value of the minimum wage and in the rate of unionization account for a significant share of the increase in wage inequality in the United States between 1979 and 1988. The role of the minimum wage is particularly important for women, while deunionization has the largest impact on men. The authors develop a semiparametric procedure that applies kernel density methods to appropriately weighted samples. The procedure provides a visually clear representation of where in the density of wages institutional and labor market forces exert the greatest impact. Copyright 1996 by The Econometric Society.},
  url={http://ideas.repec.org/a/ecm/emetrp/v64y1996i5p1001-44.html}
}


@Article{DiPrete2007,
  author = {DiPrete, Thomas A},
  title = {Is This a Great Country? Upward Mobility and the Chance for Riches in Contemporary America},
  journal = {Research in Social Stratification and Mobility},
  year = {2007},
  volume = {25},
  pages = {89-95}
}

@Article{DJM2008,
  author = {Pierre Dubois and Bruno Jullien and Thierry Magnac},
  title = {Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence},
  journal = {Econometrica},
  year = 2008,
  volume = {76},
  number = {4},
  pages = {679-725},
  month = {07},
  keywords = {},
  abstract = { We develop and estimate a model of dynamic interactions in which commitment is limited and contracts are incomplete to explain the patterns of income and consumption growth in village economies of less developed countries. Households can insure each other through both formal contracts and informal agreements, that is, self-enforcing agreements specifying voluntary transfers. This theoretical setting nests the case of complete markets and the case where only informal agreements are available. We derive a system of nonlinear equations for income and consumption growth. A key prediction of our model is that both variables are affected by lagged consumption as a consequence of the interplay of formal and informal contracting possibilities. In a semiparametric setting, we prove identification, derive testable restrictions, and estimate the model with the use of data from Pakistani villages. Empirical results are consistent with the economic arguments. Incentive constraints due to self-enforcement bind with positive probability and formal contracts are used to reduce this probability. Copyright Copyright 2008 by The Econometric Society.},
  url = {http://ideas.repec.org/a/ecm/emetrp/v76y2008i4p679-725.html}
}

@ARTICLE{Dynan2012,
title  =  {Is a Household Debt Overhang Holding Back Consumption},
author  =  {Dynan, Karen},
year  =  {2012},
journal  =  {Brookings Papers on Economic Activity},
volume  =  {44},
number  =  {1 (Spring)},
pages  =  {299-362},
keywords  =  {macroeconomics; homeowners; household debt; housing bubble; wealth; debt},
url  =  {http://EconPapers.repec.org/RePEc:bin:bpeajo:v:44:y:2012:i:2012-01:p:299-362}
}


@Article{DSK2004,
  author = {Karen E. Dynan and Jonathan Skinner and Stephen P. Zeldes},
  title = {Do the Rich Save More?},
  journal = {Journal of Political Economy},
  year = 2004,
  volume = {112},
  number = {2},
  pages = {397-444},
  month = {April},
  keywords = {},
  abstract = {The question of whether higherlifetime income households save a larger fraction of their income was the subject of much debate in the 1950s and 1960s, and while not resolved, it remains central to the evaluation of tax and macroeconomic policies. We resolve this long-standing question using new empirical methods applied to the Panel Study of Income Dynamics, the Survey of Consumer Finances, and the Consumer Expenditure Survey. We find a strong positive relationship between saving rates and lifetime income and a weaker but still positive relationship between the marginal propensity to save and lifetime income. There is little support for theories that seek to explain these positive correlations by relying solely on time preference rates, nonhomothetic preferences, or variations in Social Security benefits. There is more support for models emphasizing uncertainty with respect to income and health expenses, bequest motives, and asset-based means testing or behavioral factors causing minimal saving rates among low-income households.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v112y2004i2p397-444.html}
}

@Article{DynanElmendorfSichel2012,
  author = {Dynan Karen and Elmendorf Douglas and Sichel Daniel},
  title = {The Evolution of Household Income Volatility},
  journal = {The B.E. Journal of Economic Analysis \& Policy},
  year = 2012,
  volume = {12},
  number = {2},
  pages = {1-42},
  month = {December},
  keywords = {},
  abstract = {Using a representative longitudinal survey of U.S. households, we find that household income became noticeably more volatile between the early 1970s and the late 2000s despite the moderation seen in aggregate economic activity during this period. We estimate that the standard deviation of percent changes in household income rose about 30 percent between 1971 and 2008. This widening in the distribution of percent changes was concentrated in the tails. The share of households experiencing a 50 percent plunge in income over a two-year period climbed from about 7 percent in the early 1970s to more than 12 percent in the early 2000s before retreating to 10 percent in the run-up to the Great Recession. Households� labor earnings and transfer payments have both become more volatile over time. As best we can tell, the rise in the volatility of men�s earnings appears to owe both to greater volatility in earnings per hour and in hours worked.},
  url = {http://ideas.repec.org/a/bpj/bejeap/v12y2012i2p1-42n3.html}
}


@Article{FernandezVillaverdeKrueger2011,
  author={Fernandez-Villaverde, Jesus and Krueger, Dirk},
  title={{Consumption And Saving Over The Life Cycle: How Important Are Consumer Durables?}},
  journal={Macroeconomic Dynamics},
  year=2011,
  volume={15},
  number={05},
  pages={725-770},
  month={November},
  keywords={},
  abstract={In this paper we investigate whether a standard life-cycle model in which households purchase nondurable consumption and consumer durables and face idiosyncratic income and mortality risk as well as endogenous borrowing constraints can account for two key patterns of consumption and asset holdings over the life cycle. First, consumption expenditures on both durable and nondurable goods are hump-shaped. Second, young households keep very few liquid assets and hold most of their wealth in consumer durables. In our model durables play a dual role: they both provide consumption services and act as collateral for loans. A plausibly parameterized version of the model predicts that the interaction of consumer durables and endogenous borrowing constraints induces durables accumulation early in life and higher consumption of nondurables and accumulation of financial assets later in the life cycle, of an order of magnitude consistent with observed data.},
  url={http://ideas.repec.org/a/cup/macdyn/v15y2011i05p725-770_00.html}
}



@Article{Floden2008,
  author={Martin Floden},
  title={{Aggregate Savings When Individual Income Varies}},
  journal={Review of Economic Dynamics},
  year=2008,
  volume={11},
  number={1},
  pages={70-82},
  month={January},
  keywords={Equilibrium interest rate; Aggregate savings; Precautionary saving; Infinite horizon; General equili},
  abstract={This paper examines aggregate savings in a general equilibrium model where infinitely lived households face volatile (and possibly uncertain) income paths, hold a risk-free asset, and face a borrowing constraint. I first show that the equilibrium capital stock in an economy without uncertainty, but where individual income varies, can be larger than in an economy where each household's income is constant. When individual income is stochastic and uninsurable, the equilibrium capital stock is always larger than when income is constant. This additional capital accumulation has sometimes been interpreted as precautionary savings, but I argue that much of the additional savings are generated by permanent-income motives in combination with strict borrowing constraints. (Copyright: Elsevier)},
  url={http://ideas.repec.org/a/red/issued/05-35.html}
}




@Article{Fuhrer2000,
  author = {Jeffrey C. Fuhrer},
  title = {Habit Formation in Consumption and Its Implications for Monetary-Policy Models},
  journal = {American Economic Review},
  year = 2000,
  volume = {90},
  number = {3},
  pages = {367-390},
  month = {June},
  keywords = {},
  abstract = {This paper explores a monetary-policy model with habit formation for consumers, in which consumers' utility depends in part on current consumption relative to past consumption. The empirical tests developed in the paper show that one can reject the hypothesis of no habit formation with tremendous confidence, largely because the habit-formation model captures the gradual hump-shaped response of real spending to various shocks. The paper then embeds the habit-consumption specification in a monetary-policy model and finds that the responses of both spending and inflation to monetary-policy actions are significantly improved by this modification.},
  url = {http://ideas.repec.org/a/aea/aecrev/v90y2000i3p367-390.html}
}


@BOOK{Friedman1957,
title = {A Theory of the Consumption Function},
author = {Friedman, Milton},
year = {1957},
publisher = {National Bureau of Economic Research, Inc},
url = {http://EconPapers.repec.org/RePEc:nbr:nberbk:frie57-1}
}


@Article{GabaixLandier2008,
  author={Xavier Gabaix and Augustin Landier},
  title={{Why Has CEO Pay Increased So Much?}},
  journal={The Quarterly Journal of Economics},
  year=2008,
  volume={123},
  number={1},
  pages={49-100},
  month={02},
  keywords={},
  abstract={ This paper develops a simple equilibrium model of CEO pay. CEOs have different talents and are matched to firms in a competitive assignment model. In market equilibrium, a CEO's pay depends on both the size of his firm and the aggregate firm size. The model determines the level of CEO pay across firms and over time, offering a benchmark for calibratable corporate finance. We find a very small dispersion in CEO talent, which nonetheless justifies large pay differences. In recent decades at least, the size of large firms explains many of the patterns in CEO pay, across firms, over time, and between countries. In particular, in the baseline specification of the model's parameters, the sixfold increase of U.S. CEO pay between 1980 and 2003 can be fully attributed to the sixfold increase in market capitalization of large companies during that period. (c) 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..},
  url={http://ideas.repec.org/a/tpr/qjecon/v123y2008i1p49-100.html}
}

@Article{GaleScholz1994,
  author={William G. Gale and John Karl Scholz},
  title={{Intergenerational Transfers and the Accumulation of Wealth}},
  journal={Journal of Economic Perspectives},
  year=1994,
  volume={8},
  number={4},
  pages={145-160},
  month={Fall},
  keywords={},
  abstract={This paper uses household data to provide direct estimates of intergenerational transfers as a source of wealth. The authors distinguish between intended transfers (for example, gifts to other households) and possibly unintended transfers (bequests) and estimate that intended transfers account for at least 20 percent of net worth. Thus, a significant portion of the U.S. wealth cannot be explained by the life-cycle model, even when the model is augmented to allow for bequests. Estimated bequests can account for an additional 31 percent of net worth. The authors also show that transfers among living people are about half as large as bequests.},
  url={http://ideas.repec.org/a/aea/jecper/v8y1994i4p145-60.html}
}



@Article{GervaisKlein2010,
  author = {Gervais, Martin and Klein, Paul},
  title = {Measuring consumption smoothing in CEX data},
  journal = {Journal of Monetary Economics},
  year = 2010,
  volume = {57},
  number = {8},
  pages = {988-999},
  month = {November},
  keywords = {},
  abstract = {A new method of measuring the degree of consumption smoothing is proposed and implemented using data from the Consumer Expenditure Survey. The structure of this Survey is such that estimators previously used in the literature are inconsistent, simply because income is measured annually and consumption is measured quarterly. An AR(1) structure is imposed on the income process to obtain a proxy for quarterly income through a projection on annual income. By construction, this proxy gives rise to a measurement error which is orthogonal to the proxy itself--as opposed to the unobserved regressor--leading to a consistent estimator. Our estimates are contrasted with the output of two estimators used in the literature. This comparison shows that while the first (OLS) estimator tends to overstate the degree of risk sharing, the second (IV) estimator grossly understates it.},
  url = {http://ideas.repec.org/a/eee/moneco/v57y2010i8p988-999.html}
}


@Article{Glaeser2004,
  author = {Edward L. Glaeser},
  title = {Psychology and the Market},
  journal = {American Economic Review},
  year = 2004,
  volume = {94},
  number = {2},
  pages = {408-413},
  month = {May},
  keywords = {},
  abstract = {Prospect theory, loss aversion, mental accounts, hyperbolic discounting, cues, and the endowment effect can all be seen as examples of situationalism -- the view that people isolate decisions and overweight immediate aspects of the situation relative to longer term concerns. But outside of the laboratory, emotionally-powerful situational factors -- frames, social influence, mental accounts -- are almost always endogenous and often the result of self-interested entrepreneurs. As such, laboratory work and, indeed, psychology more generally, gives us little guidance as to market outcomes. Economics provides a stronger basis for understanding the supply of emotionally-relevant situational variables. Paradoxically situationalism actually increases the relative importance of economics.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/aea/aecrev/v94y2004i2p408-413.html}
}

@Article{GKT2003,
  author = {Mikhail Golosov and Narayana Kocherlakota and Aleh Tsyvinski},
  title = {Optimal Indirect and Capital Taxation},
  journal = {Review of Economic Studies},
  year = 2003,
  volume = {70},
  number = {3},
  pages = {569-587},
  month = {07},
  keywords = {},
  abstract = { We consider an environment in which agents' skills are private information and follow arbitrary stochastic processes. We prove that it is typically Pareto optimal for an individual's marginal benefit of investing in capital to exceed his marginal cost of doing so. This wedge is consistent with a positive tax on capital income. We also prove that it is Pareto optimal for the marginal rate of substitution between any two consumption goods to equal the marginal rate of transformation. This lack of a wedge is consistent with uniform taxation of consumption goods within a period. Copyright The Review of Economic Studies Limited, 2003.},
  url = {http://ideas.repec.org/a/bla/restud/v70y2003i3p569-587.html}
}

@Article{GomesMichaelides2003,
  author = {Francisco Gomes and Alexander Michaelides},
  title = {Portfolio Choice With Internal Habit Formation: A Life-Cycle Model With Uninsurable Labor Income Risk},
  journal = {Review of Economic Dynamics},
  year = 2003,
  volume = {6},
  number = {4},
  pages = {729-766},
  month = {October},
  keywords = {Life-cycle asset allocation; Habit formation; Liquidity constraints; Stock market participation cost},
  abstract = {Motivated by the success of internal habit formation preferences in explaining asset pricing puzzles, we introduce these preferences in a life-cycle model of consumption and portfolio choice with liquidity constraints, undiversifiable labor income risk and stock-market participation costs. In contrast to the initial motivation, we find that the model is not able to simultaneously match two very important stylized facts: a low stock market participation rate, and moderate equity holdings for those households that do invest in stocks. Habit formation increases wealth accumulation because the intertemporal consumption smoothing motive is stronger. As a result, households start participating in the stock market very early in life, and invest their portfolios almost fully in stocks. Therefore, we conclude that, with respect to its ability to match the empirical evidence on asset allocation behavior, the internal habit formation model is dominated by its time-separable utility counterpart. (Copyright: Elsevier)},
  url = {http://ideas.repec.org/a/red/issued/v6y2003i4p729-766.html}
}

@Article{GourinchasParker2002,
  author = {Pierre-Olivier Gourinchas and Jonathan A. Parker},
  title = {Consumption Over the Life Cycle},
  journal = {Econometrica},
  year = 2002,
  volume = {70},
  number = {1},
  pages = {47-89},
  month = {January},
  keywords = {},
  abstract = { This paper estimates a structural model of optimal life-cycle consumption expenditures in the presence of realistic labor income uncertainty. We employ synthetic cohort techniques and Consumer Expenditure Survey data to construct average age-profiles of consumption and income over the working lives of typical households across different education and occupation groups. The model fits the profiles quite well. In addition to providing reasonable estimates of the discount rate and risk aversion, we find that consumer behavior changes strikingly over the life cycle. Young consumers behave as buffer-stock agents. Around age 40, the typical household starts accumulating liquid assets for retirement and its behavior mimics more closely that of a certainty equivalent consumer. Our methodology provides a natural decomposition of saving and wealth into its precautionary and life-cycle components. Copyright The Econometric Society 2002.},
  url = {http://ideas.repec.org/a/ecm/emetrp/v70y2002i1p47-89.html}
}

@TechReport{Gordon2009,
  author = {Robert J. Gordon},
  title = {Misperceptions About the Magnitude and Timing of Changes in American Income Inequality},
  year = 2009,
  month = Sep,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/15351.html},
  number = {15351},
  abstract = {The rise in American inequality has been exaggerated both in magnitude and timing. Commentators lament the large gap between the growth rates of real median household income and of private sector productivity. This paper shows that a conceptually consistent measure of this growth gap over 1979 to 2007 is only one-tenth of the conventional measure. Further, the timing of the rise of inequality is often misunderstood. By some measures inequality stopped growing after 2000 and by others inequality has not grown since 1993. This cessation of inequality�s secular rise in 2000 is evident from the growth of Census mean vs. median income, and in the income share of the top one percent of the income distribution. The income share of the 91st to 95th percentile has not increased since 1983, and the income ratio of the 90th to 10th percentile has barely increased since 1986. Further, despite a transient decline in labor�s income share in 2000-06, by mid-2009 labor�s share had returned virtually to the same value as in 1983, 1991, and 2001. Recent contributions in the inequality literature have raised questions about previous research on skill-biased technical change and the managerial power of CEOs. Directly supporting our theme of prior exaggeration of the rise of inequality is new research showing that price indexes for the poor rise more slowly than for the rich, causing most empirical measures of inequality to overstate the growth of real income of the rich vs. the poor. Further, as much as two-thirds of the post-1980 increase in the college wage premium disappears when allowance is made for the faster rise in the cost of living in cities where the college educated congregate and for the lower quality of housing in those cities. A continuing tendency for life expectancy to increase faster among the rich than among the poor reflects the joint impact of education on both economic and health outcomes, some of which are driven by the behavioral choices of the less educat},
  keywords = {}
}



@Article{GottschalkMoffitt1994,
  author = {Peter Gottschalk and Robert Moffitt},
  title = {The Growth of Earnings Instability in the U.S. Labor Market},
  journal = {Brookings Papers on Economic Activity},
  year = 1994,
  volume = {25},
  number = {2},
  pages = {217-272},
  month = {},
  keywords = {macroeconomics; growth of earnings; labor market},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/bin/bpeajo/v25y1994i1994-2p217-272.html}
}

@Article{GottschalkMoffitt2002,
  author = {Robert A. Moffitt and Peter Gottschalk},
  title = {Trends in the Transitory Variance of Earnings in the United States},
  journal = {Economic Journal},
  year = 2002,
  volume = {112},
  number = {478},
  pages = {C68-C73},
  month = {March},
  keywords = {},
  abstract = { We decompose the rise in cross-sectional variance of male annual earnings in the United States from 1969 to 1996 into permanent and transitory components. We find that the variance of permanent earnings began rising in the the late 1970s and has continued to rise in the 1980s. The variance of transitory earnings also rose in the 1980s but declined in the 1990s. There are lags in the earnings process which require a structural model to pinpoint the exact calendar times at which the changes in trends occurred. Copyright Royal Economic Society 2002.},
  url = {http://ideas.repec.org/a/ecj/econjl/v112y2002i478pc68-c73.html}
}

@Article{GottschalkMoffitt2009,
  author = {Peter Gottschalk and Robert Moffitt},
  title = {The Rising Instability of U.S. Earnings},
  journal = {Journal of Economic Perspectives},
  year = 2009,
  volume = {23},
  number = {4},
  pages = {3-24},
  month = {Fall},
  keywords = {},
  abstract = {The inequality of earnings and of family incomes in the United States has increased since the late 1970s. The large rise in earnings inequality between the 1970s and the 1990s could reflect either a rise in disparity of permanent incomes, a rise in earnings instability, or some portion of both. In this paper, we provide longitudinal measures that separate changes in income inequality into changes that permanently change income to new levels and those that only reflect transitory change. We refer to the latter as changes in \&quot;income instability\&quot; and discuss how the instability of individual earnings and family income in the United States has evolved -- as a whole as well as for different types of individuals and families -- over the last quarter century. We consider alternative definitions of instability that have been proposed, and establish that all studies find that instability is considerably higher today than in the mid-1970s. This increase in instability is not a recent phenomenon. Earnings instability rose sharply in the late 1970s and early 1980s, then stabilized at these high levels through the recent period, although it may be increasing once again. We also discuss the factors that may be driving this increase in instability.},
  url = {http://ideas.repec.org/a/aea/jecper/v23y2009i4p3-24.html}
}


@TechReport{GottschalkMoffitt2011,
  author = {Robert A. Moffitt and Peter Gottschalk},
  title = {Trends in the Transitory Variance of Male Earnings in the U.S., 1970-2004},
  year = 2011,
  month = Feb,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/16833.html},
  number = {16833},
  abstract = {We estimate the trend in the transitory variance of male earnings in the U.S. using the Michigan Panel Study of Income Dynamics from 1970 to 2004. Using both an error components model as well as simpler but only approximate methods, we find that the transitory variance started to increase in the early 1970s, continued to increase through the mid-1980s, and then remained at this new higher level through the 1990s and beyond. Thus the increase mostly occurred about thirty years ago. Its increase accounts for between 31 and 49 percent of the total rise in cross-sectional variance, depending on the time period.},
  keywords = {}
}


@TechReport{GrossSouleles2001,
  author = {David Gross and Nicholas Souleles},
  title = {Consumer Response to Changes in Credit Supply: Evidence from Credit Card Data},
  year = 2001,
  month = Mar,
  institution = {Wharton School Center for Financial Institutions, University of Pennsylvania},
  type = {Center for Financial Institutions Working Papers},
  url = {http://ideas.repec.org/p/wop/pennin/01-10.html},
  number = {01-10},
  abstract = {This paper utilizes a unique new data set on credit card accounts to analyze how people respond to changes in credit supply. The data consist of a panel of several hundred thousand individual credit card accounts followed monthly for 24-36 months, from several different card issuers, with associated credit bureau data. We estimate the dynamic effects of changes in the credit limit and in interest rates, and consider the ability of different models of consumption and saving to rationalize these effects. We find that increases in credit limits generate an immediate and significant rise in debt. This response is sharpest for people starting near their limit, providing evidence that liquidity constraints are binding. However, even people starting well below their limit significantly respond. We show this result is consistent with conventional models of precautionary savings. Nonetheless there are other results that conventional models cannot easily explain, such as the fact that many credit card borrowers simultaneously hold other low yielding assets. Unlike most other studies, we also find strong effects from changes in account-specific interest rates. Debt is particularly sensitive to large declines in interest rates, which can explain the widespread use of teaser rates. The long-run elasticity of debt to the interest rate is about -1.3. Less than half of this elasticity represents balance-switching across cards, with most reflecting net changes in total borrowing. Overall, the results imply that the consumer plays a potentially important role in the transmission of monetary policy and other credit shocks.},
  keywords = {}
}

@Article{GrossSouleles2002,
  author = {David B. Gross and Nicholas S. Souleles},
  title = {Do Liquidity Constraints And Interest Rates Matter For Consumer Behavior? Evidence From Credit Card Data},
  journal = {The Quarterly Journal of Economics},
  year = 2002,
  volume = {117},
  number = {1},
  pages = {149-185},
  month = {February},
  keywords = {},
  abstract = { This paper utilizes a unique data set of credit card accounts to analyze how people respond to credit supply. Increases in credit limits generate an immediate and significant rise in debt, counter to the Permanent-Income Hypothesis. The \&quot;MPC out of liquidity\&quot; is largest for people starting near their limit, consistent with binding liquidity constraints. However, the MPC is significant even for people starting well below their limit, consistent with precautionary models. Nonetheless, there are other results that conventional models cannot easily explain, for example, why so many people are borrowing on their credit cards, and simultaneously holding low yielding assets. The long-run elasticity of debt to the interest rate is approximately -1.3, less than half of which represents balanceshifting across cards. � 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology},
  url = {http://ideas.repec.org/a/tpr/qjecon/v117y2002i1p149-185.html}
}

@Article{Guvenen2006,
  author = {Guvenen, Fatih},
  title = {Reconciling conflicting evidence on the elasticity of intertemporal substitution: A macroeconomic perspective},
  journal = {Journal of Monetary Economics},
  year = 2006,
  volume = {53},
  number = {7},
  pages = {1451-1472},
  month = {October},
  keywords = {},
  abstract = {This paper attempts to reconcile two opposing views about the elasticity of intertemporal substitution in consumption (EIS), a parameter that plays a key role in macroeconomic analysis. On the one hand, empirical studies using aggregate consumption data typically find that the EIS is close to zero (Hall, 1988). On the other hand, calibrated macroeconomic models designed to match growth and business cycle facts typically require that the EIS be close to one (Weil, 1989, Lucas, 1990, among others). We show that this apparent contradiction arises from ignoring two kinds of heterogeneity across individuals. First, a large fraction of households in the U.S. do not participate in stock markets. Second, a variety of microeconomic studies using individual-level data conclude that an individual's EIS increases with his wealth. We study a dynamic macroeconomic model featuring these two realistic sources of heterogeneity which have been largely assumed away in macroeconomics to date. We find that limited participation creates substantial wealth inequality matching that in U.S. data. Consequently, the properties of aggregate variables directly linked to wealth, such as investment and output, are almost entirely determined by the (high-elasticity) stockholders. At the same time, since consumption is much more evenly distributed across households than is wealth, estimation using aggregate consumption uncovers the low EIS of the majority of households (i.e., the poor). Moreover, this parsimonious model is also able to explain key cross-sectional facts of the U.S. data that have proved difficult to understand previously, suggesting that it can be a useful framework for studying a range of macroeconomic and policy questions.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/eee/moneco/v53y2006i7p1451-1472.html}
}


@Article{Guvenen2007,
  author = {Fatih Guvenen},
  title = {Learning Your Earning: Are Labor Income Shocks Really Very Persistent?},
  journal = {American Economic Review},
  year = 2007,
  volume = {97},
  number = {3},
  pages = {687-712},
  month = {June},
  keywords = {},
  abstract = {The current literature offers two views on the nature of the labor income process. According to the first view, individuals are subject to very persistent income shocks while facing similar life-cycle income profiles (the RIP process, Thomas MaCurdy 1982). According to the alternative, individuals are subject to shocks with modest persistence while facing individual-specific profiles (the HIP process, Lee A. Lillard and Yoram A. Weiss 1979). In this paper we study the restrictions imposed by these two processes on consumption data�in the context of a life-cycle model�to distinguish between the two views. We find that the life-cycle model with a HIP process, which has not been studied in the previous literature, is consistent with several features of consumption data, whereas the model with a RIP process is consistent with some, but not with others. We conclude that the HIP model could be a credible contender to�and along some dimensions, a more coherent alternative than�the RIP model. (JEL D83, D91, E21, J31)},
  url = {http://ideas.repec.org/a/aea/aecrev/v97y2007i3p687-712.html}
}

@Article{Guvenen2009,
  author = {Fatih Guvenen},
  title = {An Empirical Investigation of Labor Income Processes},
  journal = {Review of Economic Dynamics},
  year = 2009,
  volume = {12},
  number = {1},
  pages = {58-79},
  month = {January},
  keywords = {Idiosyncratic income risk; Incomplete markets models; Heterogeneous income profiles; Random walk mod},
  abstract = {In this paper we reassess the evidence on labor income risk. There are two leading views on the nature of the income process in the current literature. The first view, which we call the \&quot;Restricted Income Profiles\&quot; (RIP) process, holds that individuals are subject to large and very persistent shocks, while facing similar life-cycle income profiles. The alternative view, which we call the \&quot;Heterogeneous Income Profiles\&quot; (HIP) process, holds that individuals are subject to income shocks with modest persistence, while facing individual-specific income profiles.We first show that ignoring profile heterogeneity, when in fact it is present, introduces an upward bias into the estimates of persistence. Second, we estimate a parsimonious parameterization of the HIP process that is suitable for calibrating economic models. The estimated persistence is about 0.8 in the HIP process compared to about 0.99 in the RIP process. Moreover, the heterogeneity in income profiles is estimated to be substantial, explaining between 56 to 75 percent of income inequality at age 55. We also find that profile heterogeneity is substantially larger among higher educated individuals. Third, we discuss the source of identification--in other words, the aspects of labor income data that allow one to distinguish between the HIP and RIP processes. Finally, we show that the main evidence against profile heterogeneity in the existing literature---that the autocorrelations of income changes are small and negative---is also replicated by the HIP process, suggesting that this evidence may have been misinterpreted. (Copyright: Elsevier)},
  url = {http://ideas.repec.org/a/red/issued/06-15.html}
}

@TechReport{Guvenen2011,
  author = {Fatih Guvenen},
  title = {Macroeconomics With Heterogeneity: A Practical Guide},
  year = 2011,
  month = Nov,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/17622.html},
  number = {17622},
  abstract = {This article reviews macroeconomic models with heterogeneous households. A key question for the relevance of these models concerns the degree to which markets are complete. This is because the existence of complete markets imposes restrictions on (i) how much heterogeneity matters for aggregate phenomena and (ii) the types of cross-sectional distributions that can be obtained. The degree of market incompleteness, in turn, depends on two factors: (i) the richness of insurance opportunities provided by the economic environment and (ii) the nature and magnitude of idiosyncratic risks to be insured. First, I review a broad collection of empirical evidence�from econometric tests of �full insurance,� to quantitative and empirical analyses of the permanent income (�self-insurance�) model that examine how it fits the facts about life cycle allocations, to studies that try to directly measure where economies place between these two benchmarks (�partial insurance�). The empirical evidence I survey reveals significant uncertainty in the profession regarding the magnitudes of idiosyncratic risks as well as whether or not these risks have increased since the 1970s. An important difficulty stems from the fact that inequality often arises from a mixture of idiosyncratic risk and fixed (or predictable) heterogeneity, making the two challenging to disentangle. I also discuss applications of incomplete markets models to trends in wealth, consumption, and earnings inequality both over the life cycle and over time, where this challenge is evident. Third, I discuss �approximate� aggregation�the finding that some incomplete markets models generate aggregate implications very similar to representative-agent models. What approximate aggregation does and does not imply is illustrated through several examples. Finally, I discuss some computational issues relevant for solving and calibrating such models and I provide a simple yet fully parallelizable global optimization al},
  keywords = {}
}

@Article{GuvenenSmith2014,
  author={Fatih Guvenen and Anthony A. Smith},
  title={{Inferring Labor Income Risk and Partial Insurance From Economic Choices}},
  journal={Econometrica},
  year=2014,
  volume={82},
  number={},
  pages={2085-2129},
  month={November},
}



@TechReport{GKOS2015,
  author={Guvenen, Fatih and Karahan, Fatih and Ozkan, Serdar and Song, Jae},
  title={{What Do Data on Millions of U.S. Workers Reveal about Life-Cycle Earnings Risk?}},
  year=2015,
  month=Jan,
  institution={Federal Reserve Bank of Minneapolis},
  type={Working Papers},
  url={http://ideas.repec.org/p/fip/fedmwp/719.html},
  number={719},
  abstract={We study the evolution of individual labor earnings over the life cycle using a large panel data set of earnings histories drawn from U.S. administrative records. Using fully nonparametric methods, our analysis reaches two broad conclusions. First, earnings shocks display substantial deviations from lognormality�the standard assumption in the incomplete markets literature. In particular, earnings shocks display strong negative skewness and extremely high kurtosis�as high as 30 compared with 3 for a Gaussian distribution. The high kurtosis implies that in a given year, most individuals experience very small earnings shocks, and a small but non-negligible number experience very large shocks. Second, these statistical properties vary significantly both over the life cycle and with the earnings level of individuals. We also estimate impulse response functions of earnings shocks and find important asymmetries: positive shocks to high-income individuals are quite transitory, whereas negative shocks are very persistent; the opposite is true for low-income individuals. Finally, we use these rich sets of moments to estimate econometric processes with increasing generality to capture these salient features of earnings dynamics.},
  keywords={Earnings dynamics; Life-cycle earnings risk; Nonparametric estimation; Kurtosis; Skewness; Non-Guass},
}




@TechReport{GuzmanStiglitz2014,
  author = {Guzman, Martin M. and Stiglitz, Joseph E.},
  title = {Pseudo-wealth and Consumption Fluctuations},
  year = 2014,
  month = {August},
  type = {Working Paper},
}



@Article{Haider2001,
  author = {Haider, Steven J},
  title = {Earnings Instability and Earnings Inequality of Males in the United States: 1967-1991},
  journal = {Journal of Labor Economics},
  year = 2001,
  volume = {19},
  number = {4},
  pages = {799-836},
  month = {October},
  keywords = {},
  abstract = { Although much research has focused on recent increases in annual earnings inequality in the United States, the increases could have come from either of two sources: the distribution of lifetime earnings could have become more unequal or the receipt of lifetime earnings could have become more unstable. Based on an analysis of the 1968-92 Panel Study of Income Dynamics, we find that lifetime earnings inequality increased during the early 1980s and that earnings instability increased during the 1970s. We also examine how these trends are related to changes in the distribution of wages and hours and the returns to education. Copyright 2001 by University of Chicago Press.},
  url = {http://ideas.repec.org/a/ucp/jlabec/v19y2001i4p799-836.html}
}


@TechReport{HeathcoteStoreslettenViolante2004,
  author={Heathcote, Jonathan and Storesletten, Kjetil and Violante, Giovanni L},
  title={{The Cross-Sectional Implications of Rising Wage Inequality in the United States}},
  year=2004,
  month=Mar,
  institution={C.E.P.R. Discussion Papers},
  type={CEPR Discussion Papers},
  url={http://ideas.repec.org/p/cpr/ceprdp/4296.html},
  number={4296},
  abstract={This Paper explores the implications of the recent sharp rise in US wage inequality for welfare and the cross-sectional distributions of hours worked, consumption and earnings. From 1967 to 1996 cross-sectional dispersion of earnings increased more than wage dispersion, due to a rise in the correlation between wages and hours worked. Over the same period, inequality in hours worked remained roughly constant, and consumption inequality increased only modestly. Using data from the PSID, we decompose the observed rise in wage inequality into changes in the variance of permanent, persistent and transitory shocks. With this changing wage process as the only primitive, we show that a calibrated overlapping-generations model with incomplete markets can account for these trends in cross-sectional US data. We also investigate the welfare costs of the rise in wage in-equality: the ex-ante loss is equivalent to a 5\% decline in lifetime income for the worst affected cohorts.},
  keywords={consumption inequality; labour supply; wage inequality; welfare},
}




@TechReport{HeathcoteStoreslettenViolante2007,
  author = {Heathcote, Jonathan and Storesletten, Kjetil and Violante, Giovanni L},
  title = {Consumption and Labour Supply with Partial Insurance: An Analytical Framework},
  year = 2007,
  month = May,
  institution = {C.E.P.R. Discussion Papers},
  type = {CEPR Discussion Papers},
  url = {http://ideas.repec.org/p/cpr/ceprdp/6280.html},
  number = {6280},
  abstract = {This paper develops an analytical framework to study consumption and labour supply in a rich class of heterogeneous-agent economies with partial insurance. The environment allows for trade in non-contingent and state-contingent bonds, for permanent and transitory idiosyncratic productivity shocks, and for permanent preference heterogeneity and idiosyncratic preference shocks. Exact closed-form solutions are obtained for equilibrium allocations and for the first and second moments of the equilibrium joint distribution over wages, hours and consumption. With these expressions in hand, we show that all the structural preference and risk parameters in the model can be identified, even when productivity risk varies over time, given panel data on wages and hours, and cross-sectional data on consumption. We estimate the model on CEX and PSID data for the U.S. economy over the period 1967-1996. We then use the estimated parameter values to decompose inequality in all variables of interest, both over the life-cycle and across time, into cross-sectional variation in preferences, uninsurable wage risk, insurable wage risk, and measurement error.},
  keywords = {consumption; incomplete markets; inequality; labour supply; partial insurance}
}


@Article{HeathcoteStoreslettenViolante2010,
  author = {Jonathan Heathcote and Kjetil Storesletten and Giovanni L. Violante},
  title = {The Macroeconomic Implications of Rising Wage Inequality in the United States},
  journal = {Journal of Political Economy},
  year = 2010,
  volume = {118},
  number = {4},
  pages = {681-722},
  month = {08},
  keywords = {},
  abstract = { In recent decades, American workers have faced a rising college premium, a narrowing gender gap, and increasing wage volatility. This paper explores the quantitative and welfare implications of these changes. The framework is an incomplete-markets life cycle model in which individuals choose education, intrafamily time allocation, and savings. Given the observed history of the U.S. wage structure, the model replicates key trends in cross-sectional inequality in hours worked, earnings, and consumption. Recent cohorts enjoy welfare gains,on average, as higher relative wages for college graduates and for women translate into higher educational attainment and a more even division of labor within the household. (c) 2010 by The University of Chicago. Allrights reserved..},
  url = {http://ideas.repec.org/a/ucp/jpolec/v118y2010i4p681-722.html}
}


@Article{HeathcotePerriViolante2010,
  author = {Jonathan Heathcote and Fabrizio Perri and Giovanni L. Violante},
  title = {Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006},
  journal = {Review of Economic Dynamics},
  year = 2010,
  volume = {13},
  number = {1},
  pages = {15-51},
  month = {January},
  keywords = {Consumption; income; and wealth inequality; Inequality over the life cycle; Wage dynamics},
  abstract = {We conduct a systematic empirical study of cross-sectional inequality in the United States, integrating data from the Current Population Survey, the Panel Study of Income Dynamics, the Consumer Expenditure Survey, and the Survey of Consumer Finances. In order to understand how different dimensions of inequality are related via choices, markets, and institutions, we follow the mapping suggested by the household budget constraint from individual wages to individual earnings, to household earnings, to disposable income, and, ultimately, to consumption and wealth. We document a continuous and sizable increase in wage inequality over the sample period. Changes in the distribution of hours worked sharpen the rise in earnings inequality before 1982, but mitigate its increase thereafter. Taxes and transfers compress the level of income inequality, especially at the bottom of the distribution, but have little effect on the overall trend. Finally, access to financial markets has limited both the level and growth of consumption inequality. (Copyright: Elsevier)},
  url = {http://ideas.repec.org/a/red/issued/09-214.html}
}


@Article{Hall1978,
  author = {Hall, Robert E},
  title = {Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence},
  journal = {Journal of Political Economy},
  year = 1978,
  volume = {86},
  number = {6},
  pages = {971-87},
  month = {December},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v86y1978i6p971-87.html}
}

@Article{Hall1988,
  author = {Hall, Robert E},
  title = {Intertemporal Substitution in Consumption},
  journal = {Journal of Political Economy},
  year = 1988,
  volume = {96},
  number = {2},
  pages = {339-57},
  month = {April},
  keywords = {},
  abstract = { One of the important determinants of the response of saving and consumption to the real interest rate is the ela sticity of intertemporal substitution. That elasticity can be measure d by the response of the rate of change of consumption to changes in the expected real interest rate. A detailed study of data for the twe ntieth-century United States shows no strong evidence that the elasti city of intertemporal substitution is positive. Earlier findings of s ubstantially positive elasticities are reversed when appropriate esti mation methods are used. Copyright 1988 by University of Chicago Press.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v96y1988i2p339-57.html}
}


@Article{HallMishkin1982,
  author = {Hall, Robert E and Mishkin, Frederic S},
  title = {The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households},
  journal = {Econometrica},
  year = 1982,
  volume = {50},
  number = {2},
  pages = {461-81},
  month = {March},
  keywords = {},
  abstract = {We investigate the stochastic relation between income and consumption (specifically, consumption of food) within a panel of about 2,000 households. Our major findings are: 1. Consumption responds much more strongly to permanent than to transitory movements of income. 2. The response to transitory income is nonetheless clearly positive. 3. A simple test, independent of our model of consumption, rejects a central implication of the pure life cycle-permanent income hypothesis. The observed covariation of income and consumption is compatible with pure life cycle-permanent income behavior on the part of80 percent of families and simple proportionality of consumption and income among the remaining 20 percent. As a general matter, our findings support the view that families respond differently to different sources of income variations. In particular, temporary income tax policies have smaller effects on consumption than do other, more permanent changes in income of the same magnitude.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/ecm/emetrp/v50y1982i2p461-81.html}
}

@incollection{HansenRoberdsSargent1991,
  author = {Hansen, L.P. and Roberds, W. and Sargent, T.J.},
  title = {Time Series Implications of Present Value Budget Balance and of Martingale Models of Consumption and Taxes},
  booktitle = {Rational Expectations Economics},
  editor = {Hansen, L.P. and Sargent, T.J.},
  publisher = {Boulder: Westview},
  year = {1991},
  pages = {121-161}
}


@Article{Hause1980,
  author={Hause, John C},
  title={{The Fine Structure of Earnings and the On-the-Job Training Hypothesis}},
  journal={Econometrica},
  year=1980,
  volume={48},
  number={4},
  pages={1013-29},
  month={May},
  keywords={},
  abstract={No abstract is available for this item.},
  url={http://ideas.repec.org/a/ecm/emetrp/v48y1980i4p1013-29.html}
}



@Article{Heckman1974,
  author = {Heckman, James J},
  title = {Life Cycle Consumption and Labor Supply: An Explanation of the Relationship Between Income and Consumption Over the Life Cycle},
  journal = {American Economic Review},
  year = 1974,
  volume = {64},
  number = {1},
  pages = {188-94},
  month = {March},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/aea/aecrev/v64y1974i1p188-94.html}
}

@Article{HintermaierKoeniger2011,
  author = {Thomas Hintermaier and Winfried Koeniger},
  title = {On the Evolution of the US Consumer Wealth Distribution},
  journal = {Review of Economic Dynamics},
  year = 2011,
  volume = {14},
  number = {2},
  pages = {317-338},
  month = {April},
  keywords = {Life cycle; Incomplete markets; Wealth distribution; Simulated method of moments},
  abstract = {We use all available waves of the Survey of Consumer Finances to document the evolution of the wealth distribution in the US since the 1980s. Relying on the shape of this distribution we then estimate a life-cycle incomplete markets model. We find that considering a wide range of net worth percentiles for prime-age consumers between ages 26 and 55 delivers very precise estimates of the structural parameters, impatience and risk aversion. The estimated model captures how average net worth increases with age while the dispersion of net worth falls with age. The model also predicts some of the evolution of the net worth distribution since the 1980s. Feeding the observed higher labor income risk into the model increases precautionary savings while the higher experience premium of labor earnings reduces wealth accumulation. Quantitatively, these two forces imply that the model reproduces the stable average net worth for young consumers since the 1980s and the increasing dispersion of net worth for all prime-age consumers, while the model does not predict the observed increase of average net worth for older consumers between ages 46 and 55. (Copyright: Elsevier)},
  url = {http://ideas.repec.org/a/red/issued/08-75.html}
}


@Article{Huggett1993,
  author={Huggett, Mark},
  title={{The risk-free rate in heterogeneous-agent incomplete-insurance economies}},
  journal={Journal of Economic Dynamics and Control},
  year=1993,
  volume={17},
  number={5-6},
  pages={953-969},
  month={},
  keywords={},
  abstract={No abstract is available for this item.},
  url={http://ideas.repec.org/a/eee/dyncon/v17y1993i5-6p953-969.html}
}



@TechReport{BadelHuggett2014,
  author={Badel, Alejandro and Huggett, Mark},
  title={{Taxing top earners: a human capital perspective}},
  year=2014,
  month=Jul,
  institution={Federal Reserve Bank of St. Louis},
  type={Working Papers},
  url={http://ideas.repec.org/p/fip/fedlwp/2014-017.html},
  number={2014-17},
  abstract={We assess the consequences of substantially increasing the marginal tax rate on U.S. top earners using a human capital model. The top of the model Laffer curve occurs at a 53 percent top tax rate. Tax revenues and the tax rate at the top of the Laffer curve are smaller compared to an otherwise similar model that ignores the possibility of skill change in response to a tax reform. We also show that if one applies the methods used by Diamond and Saez (2011) to provide quantitative guidance for setting the tax rate on top earners to model data then the resulting tax rate exceeds the tax rate at the top of the model Laffer curve.},
  keywords={Human Capital; Marginal Tax Rates; Inequality; Laffer Curve},
}

@Article{GuisoHaliassosJiappeli2003,
  author={Luigi Guiso and Michael Haliassos and Tullio Jappelli},
  title={{Household stockholding in Europe: where do we stand and where do we go?}},
  journal={Economic Policy},
  year=2003,
  volume={18},
  number={36},
  pages={123-170},
  month={04},
  keywords={},
  abstract={ We discuss the current state of stockownership among households in major European countries, drawing parallels and contrasts with the US experience. Our analysis of detailed microeconomic data documents increasing stock market participation and persistent differences across countries in our sample: many more US, UK and Swedish households participate in the stock market than is the case in the Netherlands and, especially, in France, Germany, and Italy. At the individual household level, the data indicate that stock market participation correlates robustly with wealth and education, which have only small effects, however, on the asset share invested in stocks by households who do participate. These empirical results point to the relevance of participation costs, and we find that indicators of such costs are consistent with the observed pattern of participation across countries. Over time, higher participation was brought about by lower participation costs. We discuss the possible impact of market entry by households with different characteristics, and outline types of policies that could mitigate any undesirable stock market effects of cheaper and broader participation. Copyright (c) CEPR, CES, MSH, 2003..},
  url={http://ideas.repec.org/a/bla/ecpoli/v18y2003i36p123-170.html}
}

@Article{HubbardSkinnerZeldes1995,
  author={Hubbard, R Glenn and Skinner, Jonathan and Zeldes, Stephen P},
  title={{Precautionary Saving and Social Insurance}},
  journal={Journal of Political Economy},
  year=1995,
  volume={103},
  number={2},
  pages={360-99},
  month={April},
  keywords={},
  abstract={ This paper argues that a life cycle model can replicate observed patterns in household wealth accumulation after counting explicitly for precautionary saving and asset-based, means-tested social insurance. The authors demonstrate that social insurance programs with means tests based on assets discourage saving by households with low expected lifetime income. In addition, they evaluate the model using a dynamic programming model. Assuming common preference parameters across lifetime income groups, the authors are able to replicate the empirical pattern that low-income households are more likely than high-income households to hold virtually no wealth. Copyright 1995 by University of Chicago Press.},
  url={http://ideas.repec.org/a/ucp/jpolec/v103y1995i2p360-99.html}
}



@Article{HuggettVenturaYaron2006,
  author = {Huggett, Mark and Ventura, Gustavo and Yaron, Amir},
  title = {Human capital and earnings distribution dynamics},
  journal = {Journal of Monetary Economics},
  year = 2006,
  volume = {53},
  number = {2},
  pages = {265-290},
  month = {March},
  keywords = {},
  abstract = {Mean earnings and measures of earnings dispersion and skewness all increase in US data over most of the working life-cycle for a typical cohort as the cohort ages. We show that a benchmark human capital model can replicate these properties from the right distribution of initial human capital and learning ability. These distributions have the property that learning ability must differ across agents and that learning ability and initial human capital are positively correlated.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/eee/moneco/v53y2006i2p265-290.html}
}

@Article{Hungerford2011,
  author = {Hungerford, T. L.},
  title = {How income mobility affects income inequality: US evidence in the 1980s and 1990s},
  journal = {Journal of Income Distribution},
  volume = {20},
  number = {1},
  pages = {83-103},
  year = 2011
}


@unpublished{Hoffmann2013,
  author = {Florian Hoffmann},
  title = {HIP, RIP and the Robustness of Empirical Earnings Processes},
  year = {2013},
  note = {Working Paper}
}

@Article{Hryshko2012,
  author={Dmytro Hryshko},
  title={{Labor income profiles are not heterogeneous: Evidence from income growth rates}},
  journal={Quantitative Economics},
  year=2012,
  volume={3},
  number={2},
  pages={177-209},
  month={07},
  keywords={},
  abstract={No abstract is available for this item.},
  url={http://ideas.repec.org/a/ecm/quante/v3y2012i2p177-209.html}
}



@Article{Iacoviello2005,
  author = {Matteo Iacoviello},
  title = {House Prices, Borrowing Constraints, and Monetary Policy in the Business Cycle},
  journal = {American Economic Review},
  year = 2005,
  volume = {95},
  number = {3},
  pages = {739-764},
  month = {June},
  keywords = {},
  abstract = {I develop and estimate a monetary business cycle model with nominal loans and collateral constraints tied to housing values. Demand shocks move housing and nominal prices in the same direction, and are amplified and propagated over time. The financial accelerator is not uniform: nominal debt dampens supply shocks, stabilizing the economy under interest rate control. Structural estimation supports two key model features: collateral effects dramatically improve the response of aggregate demand to housing price shocks; and nominal debt improves the sluggish response of output to inflation surprises. Finally, policy evaluation considers the role of house prices and debt indexation in affecting monetary policy trade-offs.},
  url = {http://ideas.repec.org/a/aea/aecrev/v95y2005i3p739-764.html}
}

@Article{Iacoviello2008,
  author = {Matteo Iacoviello},
  title = {Household Debt and Income Inequality, 1963-2003},
  journal = {Journal of Money, Credit and Banking},
  year = 2008,
  volume = {40},
  number = {5},
  pages = {929-965},
  month = {08},
  keywords = {},
  abstract = { I construct an economy with heterogeneous agents that mimics the time-series behavior of the earnings distribution in the United States from 1963 to 2003. Agents face aggregate and idiosyncratic shocks and accumulate real and financial assets. I estimate the shocks that drive the model using data on income inequality, aggregate income, and measures of financial liberalization. I show how the model economy can replicate two empirical facts: the trend and cyclical behavior of household debt and the diverging patterns in consumption and wealth inequality over time. While business cycle fluctuations can account for the short-run changes in household debt, its prolonged rise of the 1980s and the 1990s can be quantitatively explained only by the concurrent increase in income inequality. Copyright (c) 2008 The Ohio State University.},
  url = {http://ideas.repec.org/a/mcb/jmoncb/v40y2008i5p929-965.html}
}

@Article{Imrohoroglu1989,
  author={Imrohoruglu, Ayse},
  title={{Cost of Business Cycles with Indivisibilities and Liquidity Constraints}},
  journal={Journal of Political Economy},
  year=1989,
  volume={97},
  number={6},
  pages={1364-83},
  month={December},
  keywords={},
  abstract={ It is almost universally agreed that individuals face incomplete insurance markets and cannot perfectly insure against the idiosyncratic risk. In this paper, simple general equilibrium models with incomplete insurance markets are examined in order to assess the impact of imperfect insurance on the magnitude of the welfare costs of business cycles. Two versions of incomplete insurance markets are considered, and certain statistical properties of the equilibrium stochastic processes in these environments are compared with those of a perfect insurance economy. Copyright 1989 by University of Chicago Press.},
  url={http://ideas.repec.org/a/ucp/jpolec/v97y1989i6p1364-83.html}
}



@TechReport{JanttiJenkins2013,
  author = {Jantti, Markus and Jenkins, Stephen P.},
  title = {Income mobility},
  year = 2013,
  month = Nov,
  institution = {Institute for Social and Economic Research},
  type = {ISER Working Paper Series},
  url = {http://ideas.repec.org/p/ese/iserwp/2013-23.html},
  number = {2013-23},
  abstract = {This paper is prepared as a chapter for the Handbook of Income Distribution, Volume 2 (edited by A. B. Atkinson and F. Bourguignon, Elsevier-North Holland, forthcoming). Like the other chapters in the volume (and its predecessor), the aim is to provide comprehensive review of a particular area of research. We survey the literature on income mobility, aiming to provide an integrated discussion of mobility within- and between-generations. We review mobility concepts, descriptive devices, measurement methods, data sources, and recent empirical evidence.},
  keywords = {}
}


@Article{JappelliPistaferri2006,
  author = {Tullio Jappelli and Luigi Pistaferri},
  title = {Intertemporal Choice and Consumption Mobility},
  journal = {Journal of the European Economic Association},
  year = 2006,
  volume = {4},
  number = {1},
  pages = {75-115},
  month = {03},
  keywords = {},
  abstract = { The theory of intertemporal consumption choice makes sharp predictions about the evolution of the entire distribution of household consumption, not just about its conditional mean. In the paper, we study the empirical transition matrix of consumption using a panel drawn from the Bank of Italy Survey of Household Income and Wealth. We estimate the parameters that minimize the distance between the empirical and the theoretical transition matrix of the consumption distribution. The transition matrix generated by our estimates matches remarkably well the empirical matrix, both in the aggregate and in samples stratified by education. Our estimates strongly reject the consumption insurance model and suggest that households smooth income shocks to a lesser extent than implied by the permanent income hypothesis. (JEL: D52, D91, I30) Copyright (c) 2006 by the European Economic Association.},
  url = {http://ideas.repec.org/a/tpr/jeurec/v4y2006i1p75-115.html}
}


@TechReport{Jenkins2010,
  author={Jenkins, Stephen P.},
  title={{The British Household Panel Survey and its Income Data}},
  year=2010,
  month=Oct,
  institution={Institute for the Study of Labor (IZA)},
  type={IZA Discussion Papers},
  url={http://ideas.repec.org/p/iza/izadps/dp5242.html},
  number={5242},
  abstract={This paper provides a self-contained introduction to the British Household Panel Survey (BHPS), concentrating on aspects relevant to analysis of the distribution of household income. I discuss BHPS design features and how data on net household income are derived. The BHPS net household income definition is modelled on that used in Britain’s official personal income distribution statistics (Households Below Average Income, HBAI). I show that cross-sectional BHPS distributions track corresponding HBAI ones relatively well over time.},
  keywords={British Household Panel Survey; household income; net income; disposable income; Households Below Av},
}



@Article{KaplanRauh2013,
  author={Steven N. Kaplan and Joshua Rauh},
  title={{It's the Market: The Broad-Based Rise in the Return to Top Talent}},
  journal={Journal of Economic Perspectives},
  year=2013,
  volume={27},
  number={3},
  pages={35-56},
  month={Summer},
  keywords={},
  abstract={One explanation that has been proposed for rising inequality is that technical change allows highly talented individuals, or \&quot;superstars\&quot; to manage or perform on a larger scale, applying their talent to greater pools of resources and reaching larger numbers of people, thus becoming more productive and higher paid. Others argue that managerial power has increased in a way that allows those at the top to receive higher pay, that social norms against higher pay levels have broken down, or that tax policy affects the distribution of surpluses between employers and employees. We offer evidence bearing on the different theories explaining the rise in inequality in the United States over recent decades. First we look the increase in pay at the highest income levels across occupations. We consider the income share of the top 1 percent over time. And we turn to evidence on inequality of wealth at the top. In looking at the wealthiest Americans, we find that those in the Forbes 400 are less likely to have inherited their wealth or to have grown up wealthy. The Forbes 400 of today also are those who were able to access education while young and apply their skills to the most scalable industries: technology, finance, and mass retail. We believe that the US evidence on income and wealth shares for the top 1 percent is most consistent with a \&quot;superstar\&quot;-style explanation rooted in the importance of scale and skill-biased technological change. It is less consistent with an argument that the gains to the top 1 percent are rooted in greater managerial power or changes in social norms about what managers should earn.},
  url={http://ideas.repec.org/a/aea/jecper/v27y2013i3p35-56.html}
}


@Article{KambourovManovskii2009,
  author = {Gueorgui Kambourov and Iourii Manovskii},
  title = {Occupational Specificity Of Human Capital},
  journal = {International Economic Review},
  year = 2009,
  volume = {50},
  number = {1},
  pages = {63-115},
  month = {02},
  keywords = {},
  abstract = { We find that returns to occupational tenure are substantial. Everything else being constant, 5 years of occupational tenure are associated with an increase in wages of 12\%-20\%. Moreover, when occupational experience is taken into account, tenure with an industry or employer has relatively little importance in accounting for the wage one receives. This finding is consistent with human capital being occupation specific. Copyright ? (2009) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.},
  url = {http://ideas.repec.org/a/ier/iecrev/v50y2009i1p63-115.html}
}


@Article{KaplanViolante2010,
  author = {Greg Kaplan and Giovanni L. Violante},
  title = {How Much Consumption Insurance beyond Self-Insurance?},
  journal = {American Economic Journal: Macroeconomics},
  year = 2010,
  volume = {2},
  number = {4},
  pages = {53-87},
  month = {October},
  keywords = {},
  abstract = {We assess the degree of consumption smoothing implicit in a calibrated life-cycle version of the standard incomplete-markets model, and we compare it to the empirical estimates of Richard Blundell, Luigi Pistaferri, and Ian Preston (2008) (BPP hereafter) on US data. Households in the data have access to more consumption insurance against permanent earnings shocks than in the model. BPP estimate that 36 percent of permanent shocks are insurable, whereas the model's counterpart of the BPP estimator varies between 7 percent and 22 percent, depending on the tightness of debt limits. We also show that the BPP estimator has a downward bias that grows as borrowing limits become tighter. (JEL D31, D91, E21).},
  url = {http://ideas.repec.org/a/aea/aejmac/v2y2010i4p53-87.html}
}


@TechReport{KindermannKrueger2014,
  author={Fabian Kindermann and Dirk Krueger},
  title={{High Marginal Tax Rates on the Top 1\%? Lessons from a Life Cycle Model with Idiosyncratic Income Risk}},
  year=2014,
  month=Oct,
  institution={Penn Institute for Economic Research, Department of Economics, University of Pennsylvania},
  type={PIER Working Paper Archive},
  url={http://ideas.repec.org/p/pen/papers/14-036.html},
  number={14-036},
  abstract={n this paper we argue that very high marginal labor income tax rates are an effective tool for social insurance even when households have preferences with high labor supply elasticity, make dynamic savings decisions, and policies have general equilibrium effects. To make this point we construct a large scale Overlapping Generations Model with uninsurable labor productivity risk, show that it has a wealth distribution that matches the data well, and then use it to characterize fiscal policies that achieve a desired degree of redistribution in society. We find that marginal tax rates on the top 1\% of the earnings distribution of close to 90\% are optimal. We document that this result is robust to plausible variation in the labor supply elasticity and holds regardless of whether social welfare is measured at the steady state only or includes transitional generations.},
  keywords={Progressive Taxation; Top 1\%; Social Insurance; Income Inequality},
}

@Misc{Kohler2015,
  author={Ulrich Kohler},
  title={{PSIDTOOLS: Stata module to facilitate access to Panel Study of Income Dynamics (PSID)}},
  year=2015,
  month=Jan,
  howpublished={Statistical Software Components, Boston College Department of Economics},
  abstract={psid is an interface to the \&quot;Panel Study of Income Dynamics\&quot; (PSID) and to the American branch of the \&quot;Cross National Equivalence File\&quot; (CNEF).},
  keywords={PSID; data management},
  url={http://ideas.repec.org/c/boc/bocode/s457951.html},
}

@Article{KopczukLupton2007,
  author={Wojciech Kopczuk and Joseph P. Lupton},
  title={{To Leave or Not to Leave: The Distribution of Bequest Motives}},
  journal={Review of Economic Studies},
  year=2007,
  volume={74},
  number={1},
  pages={207-235},
  month={},
  keywords={},
  doi={},
  abstract={ We examine the effect of observed and unobserved heterogeneity in the desire to die with positive net worth. Using a structural life-cycle model nested in a switching regression with unknown sample separation, we find that roughly three-fourths of the elderly single population has abequest motive. Both the presence and the magnitude of the bequest motive are statistically and economically significant. On average, households with a bequest motive spend about 25\% less on consumption expenditures. We conclude that, among the elderly single households in our sample, about four-fifths of their net wealth will be bequeathed and approximately half of this is due to a bequest motive. Copyright 2007, Wiley-Blackwell.},
  url={https://ideas.repec.org/a/oup/restud/v74y2007i1p207-235.html}
}


@Article{KopczukSaezSong2010,
  author = {Wojciech Kopczuk and Emmanuel Saez and Jae Song},
  title = {Earnings Inequality and Mobility in the United States: Evidence from Social Security Data since 1937},
  journal = {The Quarterly Journal of Economics},
  year = 2010,
  volume = {125},
  number = {1},
  pages = {91-128},
  month = {February},
  keywords = {},
  abstract = { This paper uses Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States. Annual earnings inequality is U-shaped, decreasing sharply up to 1953 and increasing steadily afterward. Short-term earnings mobility measures are stable over the full period except for a temporary surge during World War II. Virtually all of the increase in the variance in annual (log) earnings since 1970 is due to increase in the variance of permanent earnings (as opposed to transitory earnings). Mobility at the top of the earnings distribution is stable and has not mitigated the dramatic increase in annual earnings concentration since the 1970s. Long-term mobility among all workers has increased since the 1950s but has slightly declined among men. The decrease in the gender earnings gap and the resulting substantial increase in upward mobility over a lifetime for women are the driving force behind the increase in long-term mobility among all workers. (c) 2010 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..},
  url = {http://ideas.repec.org/a/tpr/qjecon/v125y2010i1p91-128.html}
}


@Article{KotlikoffSummers1981,
  author={Kotlikoff, Laurence J and Summers, Lawrence H},
  title={{The Role of Intergenerational Transfers in Aggregate Capital Accumulation}},
  journal={Journal of Political Economy},
  year=1981,
  volume={89},
  number={4},
  pages={706-32},
  month={August},
  keywords={},
  abstract={This paper uses historicaI U.S. data to directly estimate the contribution of intergenerational transfers to aggregate capital accumulation. The evidence presented indicates that intergenerational transfers account for the vast majority of aggregate U .S. capital formation; only a negligible fraction of actual capital accumulation can be traced u, life-cycle or \&quot;hump\&quot; savings. A major difference between this study and previous investigations of this issue is the use of more accurate longitudinal age-earnings and age-consumption profiles. These profiles are simply too flat to generate substantial lifecycle savings. This paper suggests the importance of and need for substantially greater research and data collection on intergenerational transfers. fife-cycle models of savings that emphasize savings for retirement as the dominant form of apical accumulation should give way to models that illuminate the determinants of intergenerational transfers.<P>(This abstract was borrowed from another version of this item.)},
  url={http://ideas.repec.org/a/ucp/jpolec/v89y1981i4p706-32.html}
}



@Article{KruegerPerri2006,
  author = {Dirk Krueger and Fabrizio Perri},
  title = {Does Income Inequality Lead to Consumption Inequality? Evidence and Theory},
  journal = {Review of Economic Studies},
  year = 2006,
  volume = {73},
  number = {1},
  pages = {163-193},
  month = {},
  keywords = {},
  abstract = { Using data from the Consumer Expenditure Survey, we first document that the recent increase in income inequality in the U.S. has not been accompanied by a corresponding rise in consumption inequality. Much of this divergence is due to different trends in within-group inequality, which has increased significantly for income, but little for consumption. We then develop a simple framework that allows us to characterize analytically how within-group income inequality affects consumption inequality in a world in which agents can trade a full set of contingent consumption claims, subject to endogenous constraints emanating from the limited enforcement of intertemporal contracts. Finally, we quantitatively evaluate, in the context of a calibrated general equilibrium production economy, whether this set-up, or alternatively a standard incomplete markets model, can account for the documented stylized consumption inequality facts from the U.S. data. Copyright 2006, Wiley-Blackwell.},
  url = {http://ideas.repec.org/a/oup/restud/v73y2006i1p163-193.html}
}

@MISC{KruegerPerri2011,
    author  =  {Dirk Krueger and Fabrizio Perri},
    title  =  {How Do Households Respond to Income Shocks},
    year  =  {2011},
    note = {Working Paper}
}


@TechReport{KruegerPerri2009,
  author = {Dirk Krueger and Fabrizio Perri},
  title = {Public versus Private Risk Sharing},
  year = 2009,
  month = Dec,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/15582.html},
  number = {15582},
  abstract = {Can public insurance through redistributive income taxation improve the allocation of risk in an economy in which private risk sharing is limited? The answer depends crucially on the fundamental friction that limits private risk sharing in the first place. If risk sharing is incomplete because some insurance markets are missing for model-exogenous reasons (as in Bewley, 1986 and Aiyagari, 1994) publicly provided risk sharing via a tax system generally improves on the allocation of risk. If instead private insurance markets exist but their use is limited by the absence of complete enforcement (as in Kehoe and Levine, 1993 and Kocherlakota, 1996) then the provision of public insurance can crowd out private insurance to such an extent that total consumption insurance is reduced. By reducing income risk the tax system increases the value of being excluded from private insurance markets and hence weakens the enforcement mechanism of these contracts. In this paper we theoretically characterize and numerically compute equilibria in an economy with limited enforcement and a continuum of agents facing realistic income risk and tax systems with various degrees of risk reduction (progressivity). We find that the crowding-out effect of public insurance on private insurance in the limited enforcement model can be quantitatively important, as is the positive insurance effect of taxation in the Bewley model.},
  keywords = {}
}

@Article{KrusellSmith1998,
  author = {Per Krusell and Anthony A. Smith and Jr.},
  title = {Income and Wealth Heterogeneity in the Macroeconomy},
  journal = {Journal of Political Economy},
  year = 1998,
  volume = {106},
  number = {5},
  pages = {867-896},
  month = {October},
  keywords = {},
  abstract = {How do movements in the distribution of income and wealth affect the macroeconomy? We analyze this question theoretically, using numerical methods, in the context of a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/ucp/jpolec/v106y1998i5p867-896.html}
}


@TechReport{KuismanenPistaferri2006,
  author = {Kuismanen, Mika and Pistaferri, Luigi},
  title = {Information, habits, and consumption behavior: evidence from micro data},
  year = 2006,
  month = Jan,
  institution = {European Central Bank},
  type = {Working Paper Series},
  url = {http://ideas.repec.org/p/ecb/ecbwps/20060572.html},
  number = {0572},
  abstract = {Most of the empirical literature on consumption behaviour over the last decades has focused on estimating Euler equations. However, there is now consensus that data-related problems make this approach unfruitful, especially for answering policy relevant issues. Alternatively, many papers have proposed using the consumption function to forecast behaviour. This paper follows in this tradition, by deriving an analytical consumption function in the presence of intertemporal non-separabilities, \&quot;superior information\&quot;, and income shocks of different nature, both transitory and permanent. The results provide evidence for durability, and show that people are relatively better at forecasting short-term rather than long-term shocks JEL Classification: D11, D12, D82, E21},
  keywords = {Consumption; Durability; habit persistence; panel data; Superior Information}
}


@Article{KumhofRanciereWinant2014,
  author = {Kumhof, Michael and Ranciere, Romain and Winant, Pablo},
  title = {Inequality, Leverage and Crises},
  year = 2014,
  journal = {American Economic Review},
  volume = {forthcoming}
}


@Article{Lawrance1991,
  author={Lawrance, Emily C},
  title={{Poverty and the Rate of Time Preference: Evidence from Panel Data}},
  journal={Journal of Political Economy},
  year=1991,
  volume={99},
  number={1},
  pages={54-77},
  month={February},
  keywords={},
  abstract={ This paper uses the Panel Study of Income Dynamics to study the intertemporal preferences of rich and poor households in the United States. Subjective rates of time preferences, identified from estimation of consumption Euler equations, are three to five percentage points higher for households with low permanent incomes than for those with high permanent incomes. Controlling for race and education widens this difference. With age and family composition held constant, time preference rates vary from 12 percent for white, college-educated families in the top 5 percent of the labor income distribution to 19 percent for nonwhite families without a college education whose labor incomes are in the bottom fifth percentile. Copyright 1991 by University of Chicago Press.},
  url={http://ideas.repec.org/a/ucp/jpolec/v99y1991i1p54-77.html}
}



@Article{Leland1968,
  author = {Leland, H. E.},
  title = {saving and Uncertainty: The Precautionary Demand for Saving},
  journal = {Quarterly Journal of Economics},
  year = {1968},
  volume = {82},
  pages = {465-473},
}

@Article{Lemieux2006,
  author = {Thomas Lemieux},
  title = {Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?},
  journal = {American Economic Review},
  year = 2006,
  volume = {96},
  number = {3},
  pages = {461-498},
  month = {June},
  keywords = {},
  abstract = {This paper shows that a large fraction of the 1973-2003 growth in residual wage inequality is due to composition effects linked to the secular increase in experience and education, two factors associated with higher within-group wage dispersion. The level and growth in residual wage inequality are also overstated in the March Current Population Survey (CPS) because, unlike the May or Outgoing Rotation Group (ORG) CPS, it does not measure directly the hourly wages of workers paid by the hour. The magnitude and timing of the growth in residual wage inequality provide little evidence of a pervasive increase in the demand for skill due to skill-biased technological change. (JEL J31)},
  url = {http://ideas.repec.org/a/aea/aecrev/v96y2006i3p461-498.html}
}

@Article{LTW2002,
  author = {Ligon, Ethan and Thomas, Jonathan P and Worrall, Tim},
  title = {Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies},
  journal = {Review of Economic Studies},
  year = 2002,
  volume = {69},
  number = {1},
  pages = {209-44},
  month = {January},
  keywords = {},
  abstract = { Recent work on consumption allocations in village economies finds that idiosyncratic variation in consumption is systematically related to idiosyncratic variation in income, thus rejecting the hypothesis of full risk-pooling. We attempt to explain these observations by adding limited commitment as an impediment to risk-pooling. We provide a general dynamic model and completely characterise efficient informal insurance arrangements constrained by limited commitment, and test the model using data from three Indian villages. We find that the model can fully explain the dynamic response of consumption to income, but that it fails to explain the distribution of consumption across households. Copyright 2002 by The Review of Economic Studies Limited},
  url = {http://ideas.repec.org/a/bla/restud/v69y2002i1p209-44.html}
}


@Article{LillardWeiss1978,
  author={Weiss, Yoram and Lillard, Lee A},
  title={{Experience, Vintage, and Time Effects in the Growth of Earnings: American Scientists, 1960-1970}},
  journal={Journal of Political Economy},
  year=1978,
  volume={86},
  number={3},
  pages={427-47},
  month={June},
  keywords={},
  abstract={This paper is concerned with the growth of individual earnings over time. Four aspects of time are distinguished: experience, age, vintage and calendar year. The first section of the paper provides a brief outline of a theory of planned growth in earnings. The second and main section of the paper is devoted to an empirical attempt to estimate the role of experience, vintage and age on the growth in earnings and to separate these effects from exogenous changes in market conditions. We present a detailed specification of the earnings function which accounts for the inherent multi-collinearity between variables such as time, vintage and experience. One of our main objectives is to point out the implications of this identification problem for the analysis of earnings data. Though we cannot completely eliminate this difficulty, longitudinal data, which follows the same individuals over a period of time, allows us to identify more aspects of time than one could obtain from a single cross section. We provide a descriptive analysis of the exogenous changes in market conditions occurring during the period. No attempt is made to relate them to causal changes, such as past and expected future enrollment and government research grants. We find two basic tendencies: (1) Over the decade as a whole, scientists in academic institutions enjoyed better market conditions and thus a higher growth rate than those employed in private industry. (2) Toward the end of the decade, there is a marked reduction in the market's contribution to the growth rate. In some fields, such as physics, we note an actual reduction in the real earnings of new entrants. We conclude with a brief discussion of the changes in relative earnings over the decade by field and type of employer.<P>(This abstract was borrowed from another version of this item.)},
  url={http://ideas.repec.org/a/ucp/jpolec/v86y1978i3p427-47.html}
}


@TechReport{LivshitsMacGeeTertilt2007,
  author = {Igor Livshits and James MacGee and Mich�le Tertilt},
  title = {Accounting for the Rise in Consumer Bankruptcies},
  year = 2007,
  month = Sep,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/13363.html},
  number = {13363},
  abstract = {Personal bankruptcies in the United States have increased dramatically, rising from 1.4 per thousand working age population in 1970 to 8.5 in 2002. We use a heterogeneous agent life-cycle model with competitive financial intermediaries who can observe households' earnings, age and current asset holdings to evaluate several commonly offered explanations. We find that increased uncertainty (income shocks, expense uncertainty) cannot quantitatively account for the rise in bankruptcies. Instead, the rise in filings appears to mainly reflect changes in the credit market environment. We find that credit market innovations which cause a decrease in the transactions cost of lending and a decline in the cost of bankruptcy can largely accounting for the rise in consumer bankruptcy. We also argue that the abolition of usury laws and other legal changes are unimportant.},
  keywords = {}
}


@Book{LjungqvistSargent2012,
  author={Ljungqvist, Lars and Sargent, Thomas J.},
  title={{Recursive Macroeconomic Theory, Third Edition}},
  publisher={The MIT Press},
  year=2012,
  month={June},
  volume={1},
  series={MIT Press Books},
  edition={},
  keywords={macroeconomics; economic theory; econometrics},
  abstract={Recursive methods offer a powerful approach for characterizing and solving complicated problems in dynamic macroeconomics. Recursive Macroeconomic Theory provides both an introduction to recursive methods and advanced material, mixing tools and sample applications. Only experience in solving practical problems fully conveys the power of the recursive approach, and the book provides many applications. This third edition offers substantial new material, with three entirely new chapters and significant revisions to others. The new content reflects recent developments in the field, further illustrating the power and pervasiveness of recursive methods. New chapters cover asset pricing empirics with possible resolutions to puzzles; analysis of credible government policy that entails state variables other than reputation; and foundations of aggregate labor supply with time averaging replacing employment lotteries. Other new material includes a multi-country analysis of taxation in a growth model, elaborations of the fiscal theory of the price level, and age externalities in a matching model. The book is suitable for both first- and second-year graduate courses in macroeconomics and monetary economics. Most chapters conclude with exercises. Many exercises and examples use Matlab programs, which are cited in a special index at the end of the book.},
  url={http://ideas.repec.org/b/mtp/titles/0262018748.html}
}




@TechReport{Lucas2004,
  author = {Lucas, Robert},
  title = {The Industrial Revolution - Past and Future},
  year = {2004},
  month = {May},
  type = {Essay},
  institution = {Federal Reserve Bank of Minneapolis}
}


@TechReport{LuzzettiNeumuller2011,
  author = {Luzzetti, Matthew N. and Neumuller, Seth},
  title = {Learning and the Rise in Consumer Debt and Bankruptcies},
  year = {2011},
  month = {June},
  type = {Working Paper}
}

@techreport{Ma2013,
  author={Ma, Lin},
  title={Globalization and Top Income Shares},
  institution={University of Michigan},
  year={2013},
  note={Working Paper}
}


@Article{MaCurdy1982,
  author = {MaCurdy, Thomas E.},
  title = {The Use of Time Series Processes to Model the Error Structure of Earnings in a Longitudinal Data Analysis},
  journal = {Journal of Econometrics},
  year = {1982},
  volume = {18},
  number = {1},
  pages = {83-114}
}

@Article{MankiwZeldes1991,
  author={Mankiw, N. Gregory and Zeldes, Stephen P.},
  title={{The consumption of stockholders and nonstockholders}},
  journal={Journal of Financial Economics},
  year=1991,
  volume={29},
  number={1},
  pages={97-112},
  month={March},
  keywords={},
  abstract={Only one-fourth of U.S. families own stock. This paper examines whether the consumption of stockholders differs from the consumption of non-stockholders and whether these differences help explain the empirical failures of the consumption-based CAPM. Household panel data are used to construct time series on the consumption of each group. The results indicate that the consumption of stockholders is more volatile than that of non-stockholders and is more highly correlated with the excess return on the stock market. These differences help explain the size of the equity premium, although they do not fully resolve the equity premium puzzle.<P>(This abstract was borrowed from another version of this item.)},
  url={http://ideas.repec.org/a/eee/jfinec/v29y1991i1p97-112.html}
}



@Article{MeghirPistaferri2004,
  author={Costas Meghir and Luigi Pistaferri},
  title={{Income Variance Dynamics and Heterogeneity}},
  journal={Econometrica},
  year=2004,
  volume={72},
  number={1},
  pages={1-32},
  month={01},
  keywords={},
  abstract={ Recent theoretical work has shown the importance of measuring microeconomic uncertainty for models of both general and partial equilibrium under imperfect insurance. In this paper the assumption of i.i.d. income innovations used in previous empirical studies is removed and the focus of the analysis is placed on models for the conditional variance of income shocks, which is related to the measure of risk emphasized by the theory. We first discriminate amongst various models of earnings determination that separate income shocks into idiosyncratic transitory and permanent components. We allow for education- and time-specific differences in the stochastic process for earnings and for measurement error. The conditional variance of the income shocks is modelled as a parsimonious ARCH process with both observable and unobserved heterogeneity. The empirical analysis is conducted on data drawn from the 1967-1992 Panel Study of Income Dynamics. We find strong evidence of sizeable ARCH effects as well as evidence of unobserved heterogeneity in the variances. Copyright Econometric Society 2004.},
  url={http://ideas.repec.org/a/ecm/emetrp/v72y2004i1p1-32.html}
}


@Article{Modigliani1986,
  author={Modigliani, Franco},
  title={{Life Cycle, Individual Thrift, and the Wealth of Nations}},
  journal={American Economic Review},
  year=1986,
  volume={76},
  number={3},
  pages={297-313},
  month={June},
  keywords={},
  abstract={This paper provides a review of the theory of the determinants of individual and national thrift that has come to be known as the Life Cycle Hypothesis (LCH) of saving. Applications to some current policy issues are also discussed. Part I deals with the state of the art on the eve of the formulation of the LCH some 30 years ago. Part II sets forth the theoretical foundations of the model in its original formulation and later amendment, calling attention to various implications, distinctive to it and, sometimes, counter-intuitive. It also includes a review of a number of crucial empirical tests, both at the individual and the aggregate level. Part III reviews some applications of LCH to current policy issues, though only in sketchy fashion, as space constraints prevent fuller discussion.<P>(This abstract was borrowed from another version of this item.)},
  url={http://ideas.repec.org/a/aea/aecrev/v76y1986i3p297-313.html}
}




@incollection{ModiglianiBrumberg1954,
  author      = {Modigliano, Franco and Brumberg, Richard},
  title       = {Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data},
  editor      = {Kurihara, K.},
  booktitle   = {Post Keynesian Economics},
  publisher   = {Rutgers University Press},
  address     = {New Brunswick},
  year        = {1954}
}


@misc{Moore2003,
  author = {Moore, David W.},
  title = {Half of Young People Expect to Strike It Rich},
  month = {March},
  year = {2003},
  url = {http://www.gallup.com/poll/7981/half-young-people-expect-strike-rich.aspx}
}

@Article{Nagatani1972,
  author = {Nagatani, Keizo},
  title = {Life Cycle Saving: Theory and Fact},
  journal = {American Economic Review},
  year = 1972,
  volume = {62},
  number = {3},
  pages = {344-53},
  month = {June},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/aea/aecrev/v62y1972i3p344-53.html}
}


@Article{Narajabad2012,
  author = {Borghan Nezami Narajabad},
  title = {Information Technology and the Rise of Household Bankruptcy},
  journal = {Review of Economic Dynamics},
  year = {2012},
  volume = {15},
  number = {4},
  pages = {526-550},
  month = {October},
  keywords = {Consumer bankruptcy; Information and market efficiency; Rating agencies},
  abstract = {Several studies have attributed the rise of household bankruptcy in the past two decades to the decline of social stigma associated with default. Stigma explanations, however, cannot account for the large increase in the use of unsecured credit during this period. I explain the simultaneous increase in bankruptcy rates and unsecured credit as the result of improvements in credit-rating technologies. Using an environment where borrowers face heterogeneous default costs (unobservable by creditors), I show that such improvements will lead to agents with high default costs, i.e., \&quot;safe\&quot; borrowers, being able to borrow more. A quantitative example illustrates that this increased access to credit can be large enough to raise both equilibrium borrowing and default rates. (Copyright: Elsevier)},
  url = {http://ideas.repec.org/a/red/issued/10-43.html}
}


@misc{Oswald2014,
  author = {Florian Oswald},
  title = {High Dimensional Function Approximation in Julia},
  howpublished = {\url{https://github.com/floswald/ApproXD.jl}},
  year = {2014}
}


@incollection{Piketty2008,
  author = {Thomas Piketty},
  title = {Wealth Taxation in the 21st Century: A Personal View},
  booktitle = {Reformin the Tax System for the 21st Century -- The Mirrlees Review},
  year = {2008},
  editor = {Institute for Fiscal Studies},
  publisher = {Oxford University Press}
}

@Article{Piketty2011,
  author={Thomas Piketty},
  title={{On the Long-Run Evolution of Inheritance: France 1820--2050}},
  journal={The Quarterly Journal of Economics},
  year=2011,
  volume={126},
  number={3},
  pages={1071-1131},
  month={},
  keywords={},
  abstract={ This article attempts to document and account for the long-run evolution of inheritance. We find that in a country like France the annual flow of inheritance was about 20--25\% of national income between 1820 and 1910, down to less than 5\% in 1950, and back up to about 15\% by 2010. A simple theoretical model of wealth accumulation, growth, and inheritance can fully account for the observed U-shaped pattern and levels. Using this model, we find that under plausible assumptions the annual bequest flow might reach about 20--25\% of national income by 2050. This corresponds to a capitalized bequest share in total wealth accumulation well above 100\%. Our findings illustrate the fact that when the growth rate g is small, and when the rate of return to private wealth r is permanently and substantially larger than the growth rate (say, r \&equals; 4--5\% versus g \&equals; 1--2\%), which was the case in the nineteenth century and early twentieth century and is likely to happen again in the twenty-first century, then past wealth and inheritance are bound to play a key role for aggregate wealth accumulation and the structure of lifetime inequality. Contrary to a widespread view, modern economic growth did not kill inheritance. Copyright 2011, Oxford University Press.},
  url={http://ideas.repec.org/a/oup/qjecon/v126y2011i3p1071-1131.html}
}


@book{Piketty2014,
  author={Thomas Piketty},
  title={Capital in the 21st Century},
  publisher={Harvard University Press},
  year={2014}
}

@Article{PikettySaez2003,
  author = {Thomas Piketty and Emmanuel Saez},
  title = {Income Inequality In The United States, 1913-1998},
  journal = {The Quarterly Journal of Economics},
  year = 2003,
  volume = {118},
  number = {1},
  pages = {1-39},
  month = {February},
  keywords = {},
  abstract = { This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the United States using individual tax returns data. Top income and wages shares display a U-shaped pattern over the century. Our series suggest that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes. We argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks. Top wage shares were flat before World War II, dropped precipitously during the war, and did not start to recover before the late 1960s but are now higher than before World War II. As a result, the working rich have replaced the rentiers at the top of the income distribution. � 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology},
  url = {http://ideas.repec.org/a/tpr/qjecon/v118y2003i1p1-39.html}
}

@Article{PikettySaez2006,
  author={Thomas Piketty and Emmanuel Saez},
  title={{How Progressive is the U.S. Federal Tax System? A Historical and International Perspective}},
  journal={Journal of Economic Perspectives},
  year=2006,
  volume={21},
  number={1},
  pages={3-24},
  month={Winter},
  keywords={},
  abstract={This paper provides estimates of federal tax rates by income groups in the United States since 1960, with special emphasis on very top income groups. We include individual and corporate income taxes, payroll taxes, and estate and gift taxes. The progressivity of the U.S. federal tax system at the top of the income distribution has declined dramatically since the 1960s. This dramatic drop in progressivity is due primarily to a drop in corporate taxes and in estate and gift taxes combined with a sharp change in the composition of top incomes away from capital income and toward labor income. The sharp drop in statutory top marginal individual income tax rates has contributed only moderately to the decline in tax progressivity. International comparisons confirm that is it critical to take into account other taxes than the individual income tax to properly assess the extent of overall tax progressivity, both for time trends and for cross-country comparisons. The pattern for the United Kingdom is similar to the U.S. pattern. France had less progressive taxes than the United States or the United Kingdom in 1970 but has experienced an increase in tax progressivity and has now a more progressive tax system than the United States or the United Kingdom.},
  url={http://ideas.repec.org/a/aea/jecper/v21y2007i1p3-24.html}
}

@Article{PikettySaez2006b,
  author={Thomas Piketty and Emmanuel Saez},
  title={{The Evolution of Top Incomes: A Historical and International Perspective}},
  journal={American Economic Review},
  year=2006,
  volume={96},
  number={2},
  pages={200-205},
  month={May},
  keywords={},
  abstract={This paper summarizes the main findings of the recent studies that have constructed top income and wealth shares series over the century for a number of countries using tax statistics. Most countries experience a dramatic drop in top income shares in the first part of the century due to a precipitous drop in large wealth holdings during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries but not at all in continental Europe countries or Japan. This increase is due to an unprecedented surge in top wage incomes starting in the 1970s and accelerating in the 1990s. As a result, top wage earners have replaced capital income earners at the top of the income distribution in English speaking countries. We discuss the proposed explanations and the main questions that remain open.<P>(This abstract was borrowed from another version of this item.)},
  url={http://ideas.repec.org/a/aea/aecrev/v96y2006i2p200-205.html}
}


@Article{PikettyPostelRosenthal2014,
  author={Piketty, Thomas and Postel-Vinay, Gilles and Rosenthal, Jean-Laurent},
  title={{Inherited vs self-made wealth: Theory \& evidence from a rentier society (Paris 1872–1927)}},
  journal={Explorations in Economic History},
  year=2014,
  volume={51},
  number={C},
  pages={21-40},
  month={},
  keywords={Inherited wealth; Wealth inequality; Rentiers; Paris},
  abstract={We divide decedents into two groups: “rentiers\&quot; (whose wealth is smaller than the capitalized value of their inherited wealth) and “savers” (who consumed less than their labor income). Applying this split to a unique micro data set on inheritance and matrimonial property regimes, we find that Paris from 1872 to 1927 was a “rentier society”. Rentiers made up about 10\% of the population of Parisians but owned 70\% of aggregate wealth. Rentier societies thrive when the rate of return on private wealth r is larger than the growth rate g (say, r=4\% vs g=2\%). This was the case in the 19th and early 20th centuries and is likely to happen again in the 21st century. At the time, top successors’ capital income sustains living standards far beyond what labor income alone would permit.},
  url={http://ideas.repec.org/a/eee/exehis/v51y2014icp21-40.html}
}





@Article{PikettyZucman2014,
  author = {Piketty, Thomas and Zucman, Gabriel},
  title = {Capital is Back: Wealth-Income Ratios in Rich Countries 1700-2010},
  journal = {Quarterly Journal of Economics},
  year = 2014,
  volume = {129},
  number = {3}
}


@Article{PikettySaezStantcheva2014,
  author={Thomas Piketty and Emmanuel Saez and Stefanie Stantcheva},
  title={{Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities}},
  journal={American Economic Journal: Economic Policy},
  year=2014,
  volume={6},
  number={1},
  pages={230-71},
  month={February},
  keywords={},
  abstract={This paper derives optimal top tax rate formulas in a model where top earners respond to taxes through three channels: labor supply, tax avoidance, and compensation bargaining. The optimal top tax rate increases when there are zero-sum compensation-bargaining effects. We present empirical evidence consistent with bargaining effects. Top tax rate cuts are associated with top one percent pretax income shares increases but not higher economic growth. US CEO \&quot;pay for luck\&quot; is quantitatively more prevalent when top tax rates are low. International CEO pay levels are negatively correlated with top tax rates, even controlling for firms' characteristics and performance.},
  url={http://ideas.repec.org/a/aea/aejpol/v6y2014i1p230-71.html}
}

@incollection{PikettyZucman2015,
  author = {Piketty, Thomas and Zucman, Gabriel},
  title = {Wealth and inheritance in the long run},
  editor = {Atkinson, Anthony B. and Bourguignon, Francois},
  booktitle   = {Handbook of Income Distribution},
  pages = {1303-1368},
  publisher   = {North-Holland},
  address     = {Amsterdam},
  year        = {2015}
}



@TechReport{PistaferriSaportaEksten2012,
  author = {Luigi Pistaferri and Itay Saporta-Eksten},
  title = {Changes in the Income Distribution and Aggregate Consumption},
  year = 2012,
  month = Oct,
  institution = {Department of the Treasury, Ministry of the Economy and of Finance},
  type = {Working Papers},
  url = {http://ideas.repec.org/p/itt/wpaper/2012-11.html},
  number = {11},
  abstract = {Since the late 1970s there has been a remarkable and persistent increase in wage inequality in the US and other industrialized countries. Researchers have also documented an increase in the dispersion of individual earnings, household (pooled) earnings, household disposable income, and (less consistently) consumption. Some of the changes in inequality are exogenous and reflect transformations in labor markets and institutions,1 while others are endogenous and reflect individual and household behavioural responses to such changes in terms of labor supply, asset accumulation, and participation in government insurance programs. The first goal of this paper is to discuss what we know about the effect of shifts in the distribution of income on aggregate consumption. We focus in particular on changes in inequality, volatility, and expectations, and highlight the pervasive role of heterogeneity. Our second goal is to asses the role of changes in the income distribution in explaining the joint evolution of aggregate consumption and income over the Great Recession.},
  keywords = {Income distribution; Aggregate consumption}
}

@Article{Polkovnichenko2007,
  author = {Valery Polkovnichenko},
  title = {Life-Cycle Portfolio Choice with Additive Habit Formation Preferences and Uninsurable Labor Income Risk},
  journal = {Review of Financial Studies},
  year = 2007,
  volume = {20},
  number = {1},
  pages = {83-124},
  month = {January},
  keywords = {},
  abstract = { This article explores the implications of additive and endogenous habit formation preferences in the context of a life-cycle model of an investor who has stochastic uninsurable labor income. To solve the model, I analytically derive the habit-wealth feasibility constraints and show that they depend on the worst possible path of future labor income and on the habit strength, but not on the probability of the worst income. When there is only a slim chance of a severe income shock, the model implies much more conservative portfolios. The model also predicts that for some low to moderately wealthy households, the portfolio share allocated to stocks increases with wealth. Because of this feature, the model can generate more conservative portfolios for younger than for middle-aged households. The effects of habits on portfolio choice are robust to income smoothing through borrowing or flexible labor supply. One controversial finding is that for high values of the habit strength parameter, usually required for the resolution of asset pricing puzzles in general equilibrium, the life-cycle model predicts counterfactually high wealth accumulation. (JEL: G11, G12) Copyright 2007, Oxford University Press.},
  url = {http://ideas.repec.org/a/oup/rfinst/v20y2007i1p83-124.html}
}

@Article{PrimicerivanRens2009,
  author = {Primiceri, Giorgio E. and van Rens, Thijs},
  title = {Heterogeneous life-cycle profiles, income risk and consumption inequality},
  journal = {Journal of Monetary Economics},
  year = 2009,
  volume = {56},
  number = {1},
  pages = {20-39},
  month = {January},
  keywords = { Consumption Inequality Risk Incomplete markets Heterogeneity},
  abstract = {Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use Consumer Expenditure Survey (CEX) repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in income explain all of the increase in inequality in the 1980s and 1990s. Second, we reconcile this finding with the fact that consumption inequality did not increase much over this period. Our results support the view that many permanent changes in income are predictable for consumers, even if they look unpredictable to the econometrician, consistent with models of heterogeneous income profiles.},
  url = {http://ideas.repec.org/a/eee/moneco/v56y2009i1p20-39.html}
}


@book{Rajan2011,
  author = {Raghuram Rajan},
  title = {Fault Lines: How Hidden Fractures Still Threaten the World Economy},
  publisher = {Princeton University Press},
  year = {2011}
}

@TechReport{ReiterHaliassos2005,
  author = {Haliassos, Michael and Reiter, Michael},
  title = {Credit card debt puzzles},
  year = 2005,
  month = {},
  institution = {Center for Financial Studies (CFS)},
  type = {CFS Working Paper Series},
  url = {http://ideas.repec.org/p/zbw/cfswop/200526.html},
  number = {2005/26},
  abstract = {Most US credit card holders revolve high-interest debt, often combined with substantial (i) asset accumulation by retirement, and (ii) low-rate liquid assets. Hyperbolic discounting can resolve only the former puzzle (Laibson et al., 2003). Bertaut and Haliassos (2002) proposed an ?accountant-shopper? framework for the latter. The current paper builds, solves, and simulates a fully-specified accountant-shopper model, to show that this framework can actually generate both types of co-existence, as well as target credit card utilization rates consistent with Gross and Souleles (2002). The benchmark model is compared to setups without self-control problems, with alternative mechanisms, and with impatient but fully rational shoppers. --},
  keywords = {Credit Cards; Debt; Self Control; Household Portfolios}
}


@Article{Rosen1981,
  author={Rosen, Sherwin},
  title={{The Economics of Superstars}},
  journal={American Economic Review},
  year=1981,
  volume={71},
  number={5},
  pages={845-58},
  month={December},
  keywords={},
  abstract={No abstract is available for this item.},
  url={http://ideas.repec.org/a/aea/aecrev/v71y1981i5p845-58.html}
}

@Article{Quadrini2000,
  author={Vincenzo Quadrini},
  title={{Entrepreneurship, Saving and Social Mobility}},
  journal={Review of Economic Dynamics},
  year=2000,
  volume={3},
  number={1},
  pages={1-40},
  month={January},
  keywords={},
  abstract={This paper examines entrepreneurship in order to analyze, first, the degree to which the opportunity to start or own a business affects the household's saving behavior and the implication of this behavior for the distribution of wealth and, second, the relationship between the extent of entrepreneurship in the economy and socioeconomic mobility, that is, the movement of families across wealth classes over time. First, a number of stylized facts based on data from the Panel Study of Income Dynamics and the Survey of Consumer Finances are outlined. They show relevant differences in asset holdings and wealth mobility between entrepreneurs and workers. Second, a dynamic general equilibrium model with an explicit formalization of the entrepreneurial choice is developed. Through the modeling of the entrepreneurial activities, the model generates a concentration of wealth similar to the one observed in the U.S. economy and it replicates the main patterns of wealth mobility in which entrepreneurs experience higher upward mobility than workers. (Copyright: Elsevier)},
  url={http://ideas.repec.org/a/red/issued/v3y2000i1p1-40.html}
}



@Article{SabelhausSong2009,
  author = {Sabelhaus, John and Song, Jae},
  title = {Earnings Volatility Across Groups and Time},
  journal = {National Tax Journal},
  year = 2009,
  volume = {62},
  number = {2},
  pages = {347-64},
  month = {June Cita},
  keywords = {},
  abstract = {Inferences about earnings volatility across groups and time depend on the underlying models of earnings dynamics, data sources, earnings concepts, and sampling strategies. In this paper we evaluate a model of earnings dynamics in which the permanence of shocks varies by age and education. This specification is consistent with observed earnings changes in administrative panel data, and also with the variance of earnings levels in multiple cross�section (synthetic panel) data. However, expanding the earnings concept to include self�employment and changing sampling strategy to include observations with minimal labor force attachment has first�order effects, and may help explain why some studies conclude that earnings volatility is rising.},
  url = {http://ideas.repec.org/a/ntj/journl/v62y2009i2p347-64.html}
}

@TechReport{SaezZucman2014,
  author = {Saez, Emmanuel and Zucman, Gabriel},
  title = {Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data},
  year = 2014,
  month = {October},
  type = {NBER Working Paper}
}


@Article{deSerresPelgrin2003,
  author = {Florian Pelgrin and Alain de Serres},
  title = {The Decline in Private Saving Rates in the 1990s in OECD Countries: How Much Can Be Explained by Non-wealth Determinants?},
  journal = {OECD Economic Studies},
  year = 2003,
  volume = {2003},
  number = {1},
  pages = {117-153},
  month = {},
  keywords = {},
  abstract = {The substantial decline in private-sector saving rates observed in several OECD countries in the late 1990s coincided in several cases with a sharp increase in household financial net worth. This was seen by many observers as evidence that the strong rise in equity and residential property prices during the late 1990s had been treated by households as a permanent increase in wealth, leading to an unsustainable drop in saving and raising fears of an eventual negative wealth effect. Applying estimation techniques for systems of dynamic panel equations, this paper looks at basic determinants of private saving for a sample of 15 OECD countries and finds that the sharp decline in saving observed after 1995 can be largely explained, even in a post-sample fashion, by fundamentals other than financial wealth. Among the determinants, the rise in public-sector saving is found to have contributed the most to the decline in private saving between 1995 and 2000. Based on this investigation, there is little evidence that consumers had gone too far in responding to the stock market boom of the late 1990s, even in countries where private saving rates have fallen to historically low levels. On the other hand, the results suggest that a loosening of fiscal policy may have a limited stimulatory impact on private consumption...},
  url = {http://ideas.repec.org/a/oec/ecokaa/5lmqcr2jgw47.html}
}


@Article{SiegelThaler1997,
  author={Jeremy J. Siegel and Richard H. Thaler},
  title={{Anomalies: The Equity Premium Puzzle}},
  journal={Journal of Economic Perspectives},
  year=1997,
  volume={11},
  number={1},
  pages={191-200},
  month={Winter},
  keywords={},
  abstract={The equity premium is the difference in returns between equities and fixed income securities, such as Treasury bills. The puzzle refers to the fact that the premium has historically been very large--about 6 percent per year--too large to be easily explained by risk aversion. The authors document the evidence for the puzzle and find that is exists in many countries, over long time periods, and does not seem to be explained by survivorship bias. They also summarize several theoretical explanations. The authors conclude that it is difficult to explain the equity premium without incorporating some kind of irrationality.},
  url={http://ideas.repec.org/a/aea/jecper/v11y1997i1p191-200.html}
}




@Book{Slesnick2001,
  author = {Slesnick,Daniel T.},
  title = {Consumption and Social Welfare},
  publisher = {Cambridge University Press},
  year = 2001,
  month = {October},
  volume = {},
  number = {9780521497206},
  series = {Cambridge Books},
  edition = {},
  keywords = {},
  abstract = {The most widely cited social welfare statistics in the United States are based on tabulations of family income. The picture that emerges gives cause for concern: median family income has hardly changed over the last twenty-five years while inequality has increased and poverty remains persistently high. Yet consumption-based statistics as employed in this work yield rigorous and quite different estimates of real individual and social welfare. Closely linked to economic theory, Professor Slesnick's examination of standards of living, inequality, and poverty reveal that the standard of US living has grown significantly while inequality and poverty have decreased to relatively low levels. His assessment is drawn from extended period data in order to chart long-run trends. The work will be of interest to economists, sociologists, economic historians, political scientists, and other readers in the social and policy sciences. Designed to be accessible to non-economists, technical details are relegated to appendices.},
  url = {http://ideas.repec.org/b/cup/cbooks/9780521497206.html}
}


@Article{Skinner1988,
  author = {Skinner, Jonathan},
  title = {Risky income, life cycle consumption, and precautionary savings},
  journal = {Journal of Monetary Economics},
  year = 1988,
  volume = {22},
  number = {2},
  pages = {237-255},
  month = {September},
  keywords = {},
  abstract = {This paper argues that precautionary savings against uncertain income comprise a large fraction of aggregate savings. A closed-form approximation for life cycle consumption subject to uncertain interest rates and earnings is derived by taking a second-order Taylor-Series approximation of the Euler equations. Using empirical measures of income uncertainty, I find that precautionary savings comprises up to 56 percent of aggregate life cycle savings. The derived expression for n-period optimal consumption is easily implemented for econometric estimation, and accords well with the exact numerical solution. Empirical comparisons of savings patterns among occupational groups using the Consumer Expenditure Survey contradict the predictions of the life cycle model. Riskier occupations, such as the self-employed and salespersons, save less than other occupations, although this finding may in part reflect unobservable differences in risk aversion among occupations.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/eee/moneco/v22y1988i2p237-255.html}
}

@Article{STY2004,
  author = {Storesletten, Kjetil and Telmer, Christopher I. and Yaron, Amir},
  title = {Consumption and risk sharing over the life cycle},
  journal = {Journal of Monetary Economics},
  year = 2004,
  volume = {51},
  number = {3},
  pages = {609-633},
  month = {April},
  keywords = {},
  abstract = {A striking feature of U.S. data on income and consumption is that inequality increases with age. Using both panel data and an equilibrium life cycle model, we argue that this is informative for understanding the importance and the characteristics of idiosyncratic labor market risk. We find that uncertainty distributed throughout the working years accounts for 40 percent of lifetime uncertainty, with the remainder being realized prior to entering the labor market. We estimate that shocks received over the life cycle cointain a highly persistent component, with an autocorrelation coefficient between 0.98 and unity. The joint behavior of earnings and consumption inequality, interpreted using our model, adds to the body of evidence suggesting that labor market risk are imperfectly pooled and that a precautionary motive is an important aspect of U.S. savings behavior. The restrictions imposed by general equilibrium theory play an important role in arriving at each of these conclusions.<P>(This abstract was borrowed from another version of this item.)},
  url = {http://ideas.repec.org/a/eee/moneco/v51y2004i3p609-633.html}
}

@Article{STY2004b,
  author = {Kjetil Storesletten and Chris I. Telmer and Amir Yaron},
  title = {Cyclical Dynamics in Idiosyncratic Labor Market Risk},
  journal = {Journal of Political Economy},
  year = 2004,
  volume = {112},
  number = {3},
  pages = {695-717},
  month = {June},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/ucp/jpolec/v112y2004i3p695-717.html}
}


@Article{ThomasWorrall1990,
  author = {Thomas, Jonathan and Worrall, Tim},
  title = {Income fluctuation and asymmetric information: An example of a repeated principal-agent problem},
  journal = {Journal of Economic Theory},
  year = 1990,
  volume = {51},
  number = {2},
  pages = {367-390},
  month = {August},
  keywords = {},
  abstract = {No abstract is available for this item.},
  url = {http://ideas.repec.org/a/eee/jetheo/v51y1990i2p367-390.html}
}


@TechReport{vanTreeck2012,
  author = {Till van Treeck},
  title = {Did inequality cause the U.S. financial crisis?},
  year = 2012,
  institution = {IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute},
  type = {IMK Working Paper},
  url = {http://ideas.repec.org/p/imk/wpaper/91-2012.html},
  number = {91-2012},
  abstract = {In his widely discussed book \&quot;Fault Lines\&quot; (2010), Raghuram Rajan argues that many U.S. consumers have reacted to the decline in their relative permanent incomes since the early 1980s by reducing saving and increasing debt. This has temporarily kept private consumption and thus aggregate demand and employment high, despite stagnating incomes for many households. But it also contributed to the creation of a credit bubble, which eventually burst, and a large current account deficit in the United States. We place the Rajan hypothesis in the context of competing theories of consumption, and survey the empirical literature on the effects of inequality on household behaviour beyond the largely anecdotal evidence provided in Rajan (2010). We argue that the Rajan hypothesis, supported by the empirical evidence, calls for a renaissance of the relative income hypothesis of consumption.},
  keywords = {Great Recession; income inequality; household dept; consumpion theory}
}


@TechReport{Vermeulen2014,
  author={Vermeulen, Philip},
  title={{How fat is the top tail of the wealth distribution?}},
  year=2014,
  month=Jul,
  institution={European Central Bank},
  type={Working Paper Series},
  url={http://ideas.repec.org/p/ecb/ecbwps/20141692.html},
  number={1692},
  abstract={The US Survey of Consumer Finances (SCF) and the Eurosystem’s Household Finance and Consumption Survey (HFCS) provide evidence that wealth is heavily concentrated at the upper tail of the wealth distribution. A commonly cited number for the US is that 1 percent of the households hold 30 percent of total household wealth. I investigate the reliability of upper tail wealth estimates from household wealth surveys in the presence of survey differential non-response, i.e. the fact that richer households have lower response rates than poorer households. Differential non-response can often not be remedied by adjustment of survey weights, as wealth of the non-responding households remains unobserved. Differential non-response biases tail wealth estimates downwards. Monte Carlo evidence shows that such a bias can be quite substantial. I provide a method that greatly reduces the bias. The method combines survey data with data from rich lists and uses them jointly to estimate a Pareto (power-law) distribution for tail wealth. Using this method, the paper combines the SCF and HFCS data with Forbes World’s billionaires data to provide new estimates of tail wealth. For surveys with low or no oversampling of the wealthy, these estimates tend to indicate a higher concentration of wealth at the top than those calculated from the wealth surveys alone. JEL Classification: D31},
  keywords={household finance and consumption survey; power law; survey of consumer finances; wealth distributio},
}



@TechReport{Wolff2010,
  author = {Wolff, Edward N.},
  title = {Recent Trends in Household Wealth in the United States},
  year = {2010},
  month = {Mar},
  institution = {Levy Economics Institute},
  type = {Economics Working Paper Archive},
  number = {589}
}


@Article{Yang2009,
  author = {Fang Yang},
  title = {Consumption over the Life Cycle: How Different is Housing?},
  journal = {Review of Economic Dynamics},
  year = 2009,
  volume = {12},
  number = {3},
  pages = {423-443},
  month = {July},
  keywords = {Consumption; Housing; Life cycle; Distribution},
  abstract = {Micro data over the life cycle show different patterns for consumption for housing and non-housing goods: The consumption profile of non-housing goods is hump-shaped, while the consumption profile for housing first increases monotonically and then flattens out. These patterns hold true at each consumption quartile. This paper develops a quantitative, dynamic, general equilibrium model of life-cycle behavior, that generates consumption profiles consistent with the observed data. Borrowing constraints are essential in explaining the accumulation of housing assets early in life, while transaction costs are crucial in generating the slow downsizing of the housing assets later in life. (Copyright: Elsevier)},
  url = {http://ideas.repec.org/a/red/issued/06-210.html}
}

@Article{Zeldes1989,
  author = {Zeldes, Stephen P},
  title = {Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence},
  journal = {The Quarterly Journal of Economics},
  year = 1989,
  volume = {104},
  number = {2},
  pages = {275-98},
  month = {May},
  keywords = {},
  abstract = { No one has derived closed-form solutions for consumption with stochastic labor income and constant relative risk aversion utility. A numerical technique is used here to give an accurate approximation to the solution. The resulting consumption function is often dramatically different than the certainty equivalence solution typically used, in which consumption is proportional to the sum of financial wealth and the present value of expected future income. The results help explain three important empirical consumption puzzles: excess sensitivity of consumption to transitory income, high growth of consumption in the presence of a low risk-free interest rate, and underspending of the elderly. Copyright 1989, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.},
  url = {http://ideas.repec.org/a/tpr/qjecon/v104y1989i2p275-98.html}
}


@TechReport{Zinman2013,
  author = {Jonathan Zinman},
  title = {Consumer Credit: Too Much or Too Little (or Just Right)?},
  year = 2013,
  month = Nov,
  institution = {National Bureau of Economic Research, Inc},
  type = {NBER Working Papers},
  url = {http://ideas.repec.org/p/nbr/nberwo/19682.html},
  number = {19682},
  abstract = {The intersection of research and policy on consumer credit often has a Goldilocks feel. Some researchers and policymakers posit that consumer credit markets produce too much credit. Other researchers and policymakers posit that markets produce too little credit. I review theories and evidence on inefficient consumer credit supply. For each of eight classes of theories I sketch some of the leading models and summarize any convincing empirical tests of those models. I also discuss more �circumstantial� evidence that does not map tightly into a particular model but has the potential to shed light on, or obscure, answers to key questions. Overall there is a lack of convincing evidence on whether markets err, and in which direction. We do not yet understand whether and under what conditions markets over-supply or under-supply credit, much less why.},
  keywords = {}
}



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@unpublished{Aguayo-Tellez2010,
annote = {Emailed the author (A-T) on 31/5},
author = {Aguayo-Tellez, Ernesto and Airola, Jim and Juhn, Chinhui},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Aguayo-Tellez, Airola, Juhn - 2010 - Did Trade Liberalization Help Women The Case of Mexico in the 1990s.pdf:pdf},
keywords = {Mexico,NAFTA,mexican tariffs,wages},
mendeley-tags = {Mexico,NAFTA,mexican tariffs,wages},
title = {{Did Trade Liberalization Help Women? The Case of Mexico in the 1990s}},
year = {2010}
}


@Article{Arkolakisetal2012a,
  author={Costas Arkolakis and Arnaud Costinot and Andres Rodriguez-Clare},
  title={{New Trade Models, Same Old Gains?}},
  journal={American Economic Review},
  year=2012,
  volume={102},
  number={1},
  pages={94-130},
  month={February},
  keywords={},
  abstract={ Micro-level data have had a profound influence on research in international trade over the last ten years. In many regards, this research agenda has been very successful. New stylized facts have been uncovered and new trade models have been developed to explain these facts. In this paper we investigate to what extent answers to new micro-level questions have affected answers to an old and central question in the field: how large are the welfare gains from trade? A crude summary of our results is: \&quot;So far, not much.\&quot; (JEL F11, F12)},
  url={http://ideas.repec.org/a/aea/aecrev/v102y2012i1p94-130.html}
}

@unpublished{Arkolakisetal2012b,
  author={Costas Arkolakis and Arnaud Costinot and Dave Donaldson and Andres Rodriguez-Clare},
  title={The Elusive Pro-Competitive Effects of Trade},
  note={Working Paper},
  year={2012}
}

@article{Asplund2006,
author = {Asplund, Marcus and Nocke, Volker},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Asplund, Nocke - 2006 - Firm Turnover in Imperfectly Competitive Markets.pdf:pdf},
journal = {Review of Economic Studies},
pages = {295--327},
title = {{Firm Turnover in Imperfectly Competitive Markets}},
volume = {73},
year = {2006}
}


@unpublished{Baldwin1994,

author={Baldwin, John and Dunne, Timothy and Haltiwanger, John},

title={A Comparison of Job Creation and Job Destruction in Canada and the United States},
  note={CES Research Paper},

year={1994},

}


@techreport{Ball2007,
author = {Ball, Laurence},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Ball - 2007 - Discussion of Chen, Imbs, and Scott.pdf:pdf},
number = {July},
title = {{Discussion of Chen, Imbs, and Scott}},
year = {2007}
}


@TechReport{Bellone2008,
  author={Bellone, Flora and Musso, Patrick and Nesta, Lionel and Warzynski, Frederic},
  title={Endogenous Markups, Firm Productivity and International Trade: : Testing SomeMicro-Level Implications of theMelitz-Ottaviano Model},
  year=2008,
  month=Sep,
  institution={University of Aarhus, Aarhus School of Business, Department of Economics},
  type={Working Papers},
  url={http://ideas.repec.org/p/hhs/aareco/2008_020.html},
  number={08-20},
  abstract={In this paper, we test key micro-level theoretical predictions ofMelitz and Ottaviano (MO) (2008), a model of international trade with heterogenous firms and endogenous mark-ups. At the firm-level, the MO model predicts that: 1) firm markups are negatively related to domestic market size; 2) markups are positively related to firm productivity; 3) markups are negatively related to import penetration; 4) markups are positively related to firm export intensity and markups are higher on the export market than on the domestic ones in the presence of trade barriers and/or if competitors on the export market are less efficient than competitors on the domestic market. We estimate micro-level price cost margins (PCMs) using firm-level data extending the techniques developed by Hall (1986, 1988) and extended by Domowitz et al. (1988) and Roeger (1995) for the French manufacturing industry from 1986 to 2004. We find evidence in favor of these theoretical predictions.},
  keywords={Endogenous markups; Export behavior; Productivity; Firm-level}
}

@article{Bernard2003,
author = {Bernard, Andrew B. and Eaton, Jonathan and Jensen, J. Bradford and Kortum, Samuel},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Bernard et al. - 2003 - Plants and Productivity in International Trade.pdf:pdf},
journal = {American Economic Review},
number = {4},
pages = {1268--1290},
title = {{Plants and Productivity in International Trade}},
volume = {93},
year = {2003}
}


@article{Bernard2006,
author = {Bernard, Andrew B. and Jensen, J. Bradford and Schott, Peter K.},
doi = {10.1016/j.jmoneco.2006.05.001},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Bernard, Jensen, Schott - 2006 - Trade costs, firms and productivity.pdf:pdf},
issn = {03043932},
journal = {Journal of Monetary Economics},
keywords = {employment,exit,exports,freight costs,plant deaths,survival,tariffs,transport costs},
month = jul,
number = {5},
pages = {917--937},
title = {{Trade costs, firms and productivity}},
url = {http://linkinghub.elsevier.com/retrieve/pii/S0304393206000948},
volume = {53},
year = {2006}
}


@article{Bernard2006a,
author = {Bernard, Andrew B. and Jensen, J. Bradford and Schott, Peter K.},
doi = {10.1016/j.jinteco.2005.06.002},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Bernard, Jensen, Schott - 2006 - Survival of the best fit Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing p.pdf:pdf},
issn = {00221996},
journal = {Journal of International Economics},
keywords = {1 603 646 0302,1 603 646 0995,100 tuck hall,at dartmouth,comparative advantage,corresponding author,f11,f14,fax,hanover,jel classification,l25,l60,low-wage country import competition,manufacturing plant,nh 03755,tel,tuck school of business,usa},
month = jan,
number = {1},
pages = {219--237},
title = {{Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants}},
url = {http://linkinghub.elsevier.com/retrieve/pii/S0022199605000498},
volume = {68},
year = {2006}
}


@unpublished{Borchert2007,
author = {Borchert, Ingo},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Borchert - 2007 - Preferential Trade Liberalization and the Path-Dependent Expansion of Exports.pdf:pdf},
keywords = {Mexico,exports,fix costs},
title = {{Preferential Trade Liberalization and the Path-Dependent Expansion of Exports}},
year = {2007}
}



@techreport{Brown2004,
  author={Brown, Mark W.},
  title={Renewing Canada's Manufacturing Economy: A Regional Comparison, 1973-1996},
  year={2004},
  number={11}
}

@unpublished{Cadot2005,
author = {Cadot, Olivier and Carr\`{e}re, C\'{e}line and Portugal-P\'{e}rez, Alberto and Melo, Jaime De},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Cadot et al. - 2005 - How Much Market Access in FTAs Textiles Under NAFTA.pdf:pdf},
pages = {1--41},
title = {{How Much Market Access in FTAs? Textiles Under NAFTA}},
year = {2005}
}


@phdthesis{Cai,
author = {Cai, Menghan},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Cai - Unknown - Is Globalisation Operating to Reduce Inflation Evidence from Six OECD Countries.pdf:pdf},
title = {{Is Globalisation Operating to Reduce Inflation: Evidence from Six OECD Countries}}
}


@unpublished{Calderon-Madrid2007,
author = {Calderon-Madrid, Angel and Voicu, Alexandru},
title={The NAFTA Tide : Lifting the Larger and Better Boats},note={Working Paper},
year={2007}
}


@unpublished{Chen2006,
author = {Chen, Natalie and Imbs, Jean and Scott, Andrew},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Chen, Imbs, Scott - 2006 - The dynamics of trade and competition (WP).pdf:pdf},
keywords = {Competition,Globalization,Markups,Openness,Prices,Productivity,Trade},
number = {October},
title = {{The dynamics of trade and competition (WP)}},
year = {2006}
}


@Article{Chen2009,
  author={Chen, Natalie and Imbs, Jean and Scott, Andrew},
  title={The dynamics of trade and competition},
  journal={Journal of International Economics},
  year=2009,
  volume={77},
  number={1},
  pages={50-62},
  month={February},
  keywords={ Competition Inflation Openness Globalization Markups Prices Productivity},
  abstract={We estimate a version of the Melitz and Ottaviano [Melitz, Marc J. and Ottaviano, Gianmarco I.P., 2008, Market size, trade, and productivity, Review of Economic Studies 75(1), pp. 295-316.] model of international trade with firm heterogeneity. The model is constructed to yield testable implications for the dynamics of prices, productivity and markups as functions of openness to trade at a sectoral level. The theory lends itself naturally to a difference in differences estimation, with international differences in trade openness at the sector level reflecting international differences in the competitive structure of markets. Predictions are derived for the effects of both domestic and foreign openness on each economy. Using disaggregated data for EU manufacturing over the period 1989-1999 we find short run evidence that trade openness exerts a competitive effect, with prices and markups falling and productivity rising. The response of profit margins to openness has implications on the conduct of monetary policy. Consistent with the predictions of some recent theoretical models we find some, albeit weaker, support that the long run effects are more ambiguous and may even be anti-competitive. Domestic trade liberalization also appears to induce pro-competitive effects on overseas markets.},
  url={http://ideas.repec.org/a/eee/inecon/v77y2009i1p50-62.html}
}

@misc{Chen,
author = {Chen, Natalie and Imbs, Jean and Scott, Andrew},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Chen, Imbs, Scott - Unknown - The Dynamics of Trade and Competition - Web Appendix.pdf:pdf},
title = {{The Dynamics of Trade and Competition - Web Appendix}}
}


@Article{Chor2012,
  author={Chor, Davin and Manova, Kalina},
  title={Off the cliff and back? Credit conditions and international trade during the global financial crisis},
  journal={Journal of International Economics},
  year=2012,
  volume={87},
  number={1},
  pages={117-133},
  month={},
  keywords={International trade; Financial crisis; Credit constraints; Trade finance; Trade credit},
  abstract={We study the collapse of international trade flows during the global financial crisis using detailed data on monthly US imports. We show that credit conditions were an important channel through which the crisis affected trade volumes, by exploiting the variation in the cost of capital across countries and over time, as well as the variation in financial vulnerability across sectors. Countries with higher interbank rates and thus tighter credit markets exported less to the US during the peak of the crisis. This effect was especially pronounced in sectors that require extensive external financing, have limited access to trade credit, or have few collateralizable assets. Exports of financially vulnerable industries were thus more sensitive to the cost of external capital than exports of less vulnerable industries, and this sensitivity rose during the financial crisis. The quantitative implications of our estimates for trade volumes highlight the large real effects of financial crises and the potential gains from policy intervention.},
  url={http://ideas.repec.org/a/eee/inecon/v87y2012i1p117-133.html}
}

@article{Clausing2001,
author = {Clausing, Kimberly A},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Clausing - 2001 - Trade creation and trade diversion in the Canada � United States Free Trade Agreement.pdf:pdf},
journal = {Canadian Journal of Economics/Revue canadienne d'\'{e}conomique},
number = {3},
pages = {677--696},
title = {{Trade creation and trade diversion in the Canada � United States Free Trade Agreement}},
volume = {34},
year = {2001}
}


@article{Corcos2011,
author = {Corcos, Gregory and Gatto, Massimo Del and Mion, Giordano and Ottaviano, Gianmarco I P},
doi = {10.1111/j.1468-0297.2011.02487.x.},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Corcos et al. - 2011 - Productivity and Firm Selection Quantifying the 'New' Gains From Trade.pdf:pdf},
journal = {Economic Journal},
pages = {754--798},
title = {{Productivity and Firm Selection: Quantifying the 'New' Gains From Trade}},
volume = {122},
year = {2011}
}

@incollection{CostinotRodriguez2014,
  author = {Costinot, Arnaud and Rodriguez-Clare, Andres},
  title = {Trade Theory with Numbers: Quantifying the Consequences of Globalization},
  editor = {Gopinath, Gita and Helpman, Elhanan and Rogoff, Ken},
  booktitle   = {Handbook of International Economics, Vol. 4},
  pages = {197-261},
  publisher   = {Elsevier},
  address     = {Amsterdam},
  year        = {2014}
}

@ARTICLE{DixCarneiro2014,
title = {Trade Liberalization and Labor Market Dynamics},
author = {Dix‐Carneiro, Rafael},
year = {2014},
journal = {Econometrica},
volume = {82},
number = {3},
pages = {825-885}
}


@article{Dunne1988,
author = {Dunne, Timothy and Roberts, Mark J and Samuelson, Larry},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Dunne, Roberts, Samuelson - 1988 - Patterns of firm entry and exit in U.S. manufacturing industries.pdf:pdf},
journal = {RAND Journal of Economics},
number = {4},
pages = {495--515},
title = {{Patterns of firm entry and exit in U.S. manufacturing industries}},
volume = {19},
year = {1988}
}


@unpublished{Edmond2012,
author={Edmond, Chris and Midrigan, Virgiliu and Xu, Daniel Yi},
title={Competition, Markups, and the Gains from International Trade},
  note={Working Paper},
year={2012}

}


@techreport{Foster2006,
author = {Foster, Lucia and Haltiwanger, John and Kim, Namsuk},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Foster, Haltiwanger, Kim - 2006 - Gross Job Flows for the U.S. Manufacturing Sector Measurement from the Longitudinal Research Database.pdf:pdf},
title = {{Gross Job Flows for the U.S. Manufacturing Sector: Measurement from the Longitudinal Research Database}},
year = {2006}
}


@unpublished{Fuentes2009,
author = {Fuentes, Miguel and Ibarraran, Pablo},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Fuentes, Ibarraran - 2009 - Firm Dynamics and Real Exchange Rate Fluctuations Does Trade Openness Matter Evidence from Mexico�s Manufact.pdf:pdf},
keywords = {NAFTA,RER Shocks,Tequila Crisis,external adjustment,firm-level evidence of effects of RER shocks},
number = {4494},
title = {{Firm Dynamics and Real Exchange Rate Fluctuations: Does Trade Openness Matter? Evidence from Mexico�s Manufacturing Sector}},
year = {2009}
}


@article{Fukao2003,
author = {Fukao, Kyoji and Okubo, Toshihiro and Stern, Robert M.},
doi = {10.1016/S1062-9408(02)00118-3},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Fukao, Okubo, Stern - 2003 - An econometric analysis of trade diversion under NAFTA.pdf:pdf},
issn = {10629408},
journal = {The North American Journal of Economics and Finance},
keywords = {nafta,trade diversion},
month = mar,
number = {1},
pages = {3--24},
title = {{An econometric analysis of trade diversion under NAFTA}},
url = {http://linkinghub.elsevier.com/retrieve/pii/S1062940802001183},
volume = {14},
year = {2003}
}


@article{Geroski1995,
author = {Geroski, P A},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Geroski - 1995 - What do we know about entry.pdf:pdf},
journal = {International Journal of Industrial Organization},
keywords = {entry,exit,j e l classification,l1,market dynamics},
pages = {421--440},
title = {{What do we know about entry ?}},
volume = {13},
year = {1995}
}


@unpublished{Grether1999,
author = {Grether, Jean-Marie and de Melo, Jaime and Olarreage, Marcelo},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Grether, de Melo, Olarreage - 1999 - Who Determines Mexican Trade Policy.pdf:pdf},
number = {September},
title = {{Who Determines Mexican Trade Policy?}},
year = {1999}
}


@Article{GrossmanHelpman1990,
  author={Grossman, Gene M and Helpman, Elhanan},
  title={{Trade, Innovation, and Growth}},
  journal={American Economic Review},
  year=1990,
  volume={80},
  number={2},
  pages={86-91},
  month={May},
  keywords={},
  abstract={No abstract is available for this item.},
  url={http://ideas.repec.org/a/aea/aecrev/v80y1990i2p86-91.html}
}


@unpublished{Gudat2012,
author = {Gudat, Nils H and Weldzius, Ryan M},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Gudat, Weldzius - 2012 - The Competitive Effects of Trade Liberalization in North America.pdf:pdf},
title = {{The Competitive Effects of Trade Liberalization in North America}},
year = {2012}
}


@article{Head1999,
author = {Head, Keith and Ries, John},
doi = {10.1016/S0022-1996(98)00019-1},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Head, Ries - 1999 - Rationalization effects of tariff reductions.pdf:pdf},
issn = {00221996},
journal = {Journal of International Economics},
keywords = {f1,imperfect competition,jel classification,scale,trade policy},
month = apr,
number = {2},
pages = {295--320},
title = {{Rationalization effects of tariff reductions}},
url = {http://linkinghub.elsevier.com/retrieve/pii/S0022199698000191},
volume = {47},
year = {1999}
}


@Article{Hopenhayn1992,
  author={Hopenhayn, Hugo A},
  title={Entry, Exit, and Firm Dynamics in Long Run Equilibrium},
  journal={Econometrica},
  year=1992,
  volume={60},
  number={5},
  pages={1127-50},
  month={September},
  keywords={},
  abstract={ A dynamic stochastic model for a competitive industry is developed in which entry, exit, and the growth of firms' output and employment is determined. The paper extends long-run industry equilibrium theory to account for entry, exit, and heterogeneity in the size and growth rate of firms. Conditions under which there is entry and exit in the long run are developed. Cross sectional implications and distributions of profits and value of firms are derived. Comparative statics on the equilibrium size distribution and turnover rates are analyzed. Copyright 1992 by The Econometric Society.},
  url={http://ideas.repec.org/a/ecm/emetrp/v60y1992i5p1127-50.html}
}

@article{Juhn2013,
author = {Juhn, Chinhui and Ujhelyi, Gergely and Villegas-Sanchez, Carolina},
doi = {10.1257/aer.103.3.269},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Juhn, Ujhelyi, Villegas-Sanchez - 2013 - Trade Liberalization and Gender Inequality.pdf:pdf},
issn = {0002-8282},
journal = {American Economic Review P\&P},
month = may,
number = {3},
pages = {269--273},
title = {{Trade Liberalization and Gender Inequality}},
url = {http://pubs.aeaweb.org/doi/abs/10.1257/aer.103.3.269},
volume = {103},
year = {2013}
}


@Article{Kilian2009,
  author={Kilian, Lutz and Rebucci, Alessandro and Spatafora, Nikola},
  title={Oil shocks and external balances},
  journal={Journal of International Economics},
  year=2009,
  volume={77},
  number={2},
  pages={181-194},
  month={April},
  keywords={ Oil prices External adjustment Oil demand Oil supply International financial integration Valuation },
  abstract={We provide estimates of the effects of demand and supply shocks in the global crude oil market on several measures of oil exporters' and oil importers' external balances, including the oil trade balance, the non-oil trade balance, the current account, capital gains, and changes in net foreign assets (NFA). First, we show that the effect of oil demand and supply shocks on the merchandise trade balance and the current account, which depending on the source of the shock can be large, depends critically on the response of the non-oil trade balance. Our results provide evidence of an intermediate degree of international financial integration. Second, we document the presence of large and systematic valuation effects in response to these shocks. Valuation effects overall tend to cushion the effect of oil demand and supply shocks on the NFA positions of oil exporters and oil importers. Third, we quantify the overall importance of global business cycle demand shocks as well as oil-market specific demand and supply shocks for external balances.},
  url={http://ideas.repec.org/a/eee/inecon/v77y2009i2p181-194.html}
}

@article{Kosteas2008,
author = {Kosteas, Vasilios D.},
doi = {10.1016/j.worlddev.2008.02.007},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Kosteas - 2008 - Trade Protection and Capital Imports in the Mexican Manufacturing Sector.pdf:pdf},
issn = {0305750X},
journal = {World Development},
keywords = {capital imports,latin america,mexico,trade protection},
month = dec,
number = {12},
pages = {2822--2837},
publisher = {Elsevier Ltd},
title = {{Trade Protection and Capital Imports in the Mexican Manufacturing Sector}},
url = {http://linkinghub.elsevier.com/retrieve/pii/S0305750X08001678},
volume = {36},
year = {2008}
}

\
@article{Krebs2010,
author = {Krebs, Tom and Krishna, Pravin and Maloney, William},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Krebs, Krishna, Maloney - 2010 - Trade Policy , Income Risk , and Welfare.pdf:pdf},
journal = {Review of Economics and Statistics},
keywords = {Income Risk,Trade},
mendeley-tags = {Income Risk,Trade},
number = {3},
pages = {467--481},
title = {{Trade Policy , Income Risk , and Welfare}},
volume = {92},
year = {2010}
}


@article{Krebs2010a,
author = {Krebs, Tom and Krishna, Pravin and Maloney, William},
doi = {10.1162/REST\_a\_00002},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Krebs, Krishna, Maloney - 2010 - Trade Policy, Income Risk, and Welfare.pdf:pdf},
journal = {Review of Economics and Statistics},
number = {3},
pages = {467--481},
title = {{Trade Policy, Income Risk, and Welfare}},
volume = {92},
year = {2010}
}


@Article{Krugman1991,
  author={Krugman, Paul},
  title={Increasing Returns and Economic Geography},
  journal={Journal of Political Economy},
  year=1991,
  volume={99},
  number={3},
  pages={483-99},
  month={June},
  keywords={},
  abstract={ This paper develops a simple model that shows how a country can endogenously become differentiated into an industrialized \&quot;core\&quot; and an agricultural \&quot;periphery.\&quot; In order to realize scale economies while minimizing transport costs, manufacturing firms tend to locate in the region with larger demand, but the location of demand itself depends on the distribution of manufacturing. Emergence of a core-periphery pattern depends on transportations costs, economies of scale, and the share of manufacturing in national income. Copyright 1991 by University of Chicago Press.},
  url={http://ideas.repec.org/a/ucp/jpolec/v99y1991i3p483-99.html}
}

@unpublished{Loecker2012,
author = {Loecker, Jan De and Goldberg, Pinelopi K. and Khandelwal, Amit K. and Pavcnik, Nina},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Loecker et al. - 2012 - Prices, Markups and Trade Reform.pdf:pdf},
title = {{Prices, Markups and Trade Reform}},
year = {2012}
}


@article{Lora2012,
author = {Lora, S. G. and Cordova, E. L. and Kuper, J. Z.},
doi = {10.1093/oxrep/grs010},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Lora, Cordova, Kuper - 2012 - Mexican unilateral trade liberalization in the middle of a global economic crisis.pdf:pdf},
issn = {0266-903X},
journal = {Oxford Review of Economic Policy},
keywords = {exports,f130,f140,fta,jel classification,mexico,nafta,tariff,trade liberalization,trade policy,trade protection},
month = nov,
number = {2},
pages = {324--346},
title = {{Mexican unilateral trade liberalization in the middle of a global economic crisis}},
url = {http://oxrep.oxfordjournals.org/cgi/doi/10.1093/oxrep/grs010},
volume = {28},
year = {2012}
}


@Article{Melitz2003,
  author={Marc J. Melitz},
  title={The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity},
  journal={Econometrica},
  year=2003,
  volume={71},
  number={6},
  pages={1695-1725},
  month={November},
  keywords={},
  abstract={ This paper develops a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade. The model shows how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market) and will simultaneously force the least productive firms to exit. It then shows how further increases in the industry's exposure to trade lead to additional inter-firm reallocations towards more productive firms. The paper also shows how the aggregate industry productivity growth generated by the reallocations contributes to a welfare gain, thus highlighting a benefit from trade that has not been examined theoretically before. The paper adapts Hopenhayn's (1992a) dynamic industry model to monopolistic competition in a general equilibrium setting. In so doing, the paper provides an extension of Krugman's (1980) trade model that incorporates firm level productivity differences. Firms with different productivity levels coexist in an industry because each firm faces initial uncertainty concerning its productivity before making an irreversible investment to enter the industry. Entry into the export market is also costly, but the firm's decision to export occurs after it gains knowledge of its productivity. Copyright The Econometric Society 2003.},
  url={http://ideas.repec.org/a/ecm/emetrp/v71y2003i6p1695-1725.html}
}

@article{MelitzOttaviano2008,

  author = {Melitz, Marc J. and Ottaviano, Gianmarco I. P.},
  doi = {10.1111/j.1467-937X.2007.00463.x},

file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Melitz, Ottaviano - 2008 - Market Size, Trade, and Productivity.pdf:pdf},

issn = {0034-6527},

  journal = {Review of Economic Studies},
  month = jan,

number = {1},

pages = {295--316},

title = {{Market Size, Trade, and Productivity}},

url = {http://restud.oxfordjournals.org/lookup/doi/10.1111/j.1467-937X.2007.00463.x},
  volume = {75},

year = {2008}

}


@TechReport{MelitzRedding2013,
  author={Marc J. Melitz and Stephen J. Redding},
  title={{New Trade Models, New Welfare Implications}},
  year=2013,
  month=Mar,
  institution={National Bureau of Economic Research, Inc},
  type={NBER Working Papers},
  url={http://ideas.repec.org/p/nbr/nberwo/18919.html},
  number={18919},
  abstract={We examine whether firm heterogeneity matters for the aggregate welfare implications of trade by comparing heterogeneous and homogeneous firm models. We show that the endogenous entry/ exit decisions of firms into/out of the domestic and export market provide a new channel for welfare gains that is absent from models without firm heterogeneity. We use a theoretical comparative static to isolate the additional component of welfare associated with this channel and to show that models of firm heterogeneity have new aggregate welfare implications. We express the welfare gains from trade in the heterogeneous and homogeneous firm models in terms of observable empirical moments. We show that in the general cases of these models the aggregate domestic trade share and trade elasticity are not sufficient statistics for welfare.},
  keywords={},
}



@Article{MelitzTrefler2012,
  author={Marc J. Melitz and Daniel Trefler},
  title={{Gains from Trade When Firms Matter}},
  journal={Journal of Economic Perspectives},
  year=2012,
  volume={26},
  number={2},
  pages={91-118},
  month={Spring},
  keywords={},
  abstract={The rising prominence of intra-industry trade and huge multinationals has transformed the way economists think about the gains from trade. In the past, we focused on gains that stemmed either from endowment differences (wheat for iron ore) or inter-industry comparative advantage (David Ricardo's classic example of cloth for port). Today, we focus on three sources of gains from trade: 1) love-of-variety gains associated with intra-industry trade; 2) allocative efficiency gains associated with shifting labor and capital out of small, less-productive firms and into large, more-productive firms; and 3) productive efficiency gains associated with trade-induced innovation. This paper reviews these three sources of gains from trade both theoretically and empirically. Our empirical evidence will be centered on the experience of Canada following its closer economic integration in 1989 with the United States�the largest example of bilateral intra-industry trade in the world�but we will also describe evidence for other countries.},
  url={http://ideas.repec.org/a/aea/jecper/v26y2012i2p91-118.html}
}


@article{Ottaviano2002,
author = {Ottaviano, Gianmarco I. P. and Tabuchi, Takatoshi and Thisse, Jacques-Francois},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Ottaviano, Tabuchi, Thisse - 2002 - Agglomeration and Trade Revisited.pdf:pdf},
journal = {International Economic Review},
number = {2},
pages = {409--436},
title = {{Agglomeration and Trade Revisited}},
volume = {43},
year = {2002}
}


@book{Piermartini,
author = {Piermartini, Roberta and Teh, Robert},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Piermartini, Teh - Unknown - Demystifying Modelling Methods for Trade Policy.pdf:pdf},
isbn = {9287033285},
title = {{Demystifying Modelling Methods for Trade Policy}}
}


@unpublished{Revenga1995,
author = {Revenga, Ana},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Revenga - 1995 - Employment and Wage Effects of Trade Liberalization The Case of Mexican Manufacturing.pdf:pdf},
number = {October},
title = {{Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing}},
year = {1995}
}


@article{Bernard2007,
author = {Bernard, Andrew B. and Redding, Stephen J. and Schott, Peter K.},
doi = {10.1111/j.1467-937X.2007.00413.x},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Bernard, Redding, Schott - 2007 - Comparative Advantage and Heterogeneous Firms.pdf:pdf},
issn = {0034-6527},
journal = {Review of Economic Studies},
month = jan,
number = {1},
pages = {31--66},
title = {{Comparative Advantage and Heterogeneous Firms}},
url = {http://restud.oxfordjournals.org/lookup/doi/10.1111/j.1467-937X.2007.00413.x},
volume = {74},
year = {2007}
}


@Article{Redding2011,
  author={Stephen J. Redding},
  title={Theories of Heterogeneous Firms and Trade},
  journal={Annual Review of Economics},
  year=2011,
  volume={3},
  number={1},
  pages={77-105},
  month={09},
  keywords={international trade; within-industry reallocation; selection into exporting},
  abstract={This article reviews the recent theoretical literature on heterogeneous firms and trade, which emphasizes firm selection into international markets and reallocations of resources across firms. We discuss the empirical challenges that motivated this research and its relationship to traditional trade theories. We examine the implications of firm heterogeneity for comparative advantage, market size, aggregate trade, the welfare gains from trade, and the relationship between trade and income distribution. Although a number of studies examine the endogenous response of firm productivity to trade liberalization, modeling internal firm organization and the origins of firm heterogeneity remain interesting areas of ongoing research.},
  url={http://ideas.repec.org/a/anr/reveco/v3y2011p77-105.html}
}

@article{Romalis2007,
author = {Romalis, John},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Romalis - 2007 - NAFTA's and CUSFTA's Impact on International Trade.pdf:pdf},
journal = {Review of Economics and Statistics},
number = {3},
pages = {416--435},
title = {{NAFTA's and CUSFTA's Impact on International Trade}},
volume = {89},
year = {2007}
}


@article{Townsend2007,
author = {Townsend, James},
doi = {10.1111/j.1365-2966.2007.00400.x},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Townsend - 2007 - Do tariff reductions affect the wages of workers in protected industries Evidence from the Canada-U.S. Free Trade Agre.pdf:pdf},
issn = {00084085},
journal = {Canadian Journal of Economics/Revue canadienne d'\'{e}conomique},
month = feb,
number = {1},
pages = {69--92},
title = {{Do tariff reductions affect the wages of workers in protected industries? Evidence from the Canada-U.S. Free Trade Agreement}},
url = {http://doi.wiley.com/10.1111/j.1365-2966.2007.00400.x},
volume = {40},
year = {2007}
}

@misc{Hlavac2014,
author = {Hlavac, Mark},
title = {stargazer: LaTeX code and ASCII text for well-formatted regression and summary statistics tables. R package version 5.1},
howpublished = {CRAN},
year = {2004}
}


@article{Trefler2004,
author = {Trefler, Daniel},
file = {:C$\backslash$:/Users/tew207/AppData/Local/Mendeley Ltd./Mendeley Desktop/Downloaded/Trefler - 2004 - The Long and Short of the Canada-U.S. Free Trade Agreement.pdf:pdf},
journal = {American Economic Review},
number = {4},
pages = {870--895},
title = {{The Long and Short of the Canada-U.S. Free Trade Agreement}},
volume = {94},
year = {2004}
}

@misc{Townsend2015,
  author = {Townsend, A.},
  title = {FastGaussQuadrature.jl},
  howpublished = {\url{https://github.com/ajt60gaibb/FastGaussQuadrature.jl} (GitHub repository)},
  year = {2015}
}

@misc{Vandendriessche2015,
  author = {Vandendriessche, Damien},
  title = {Stata command to merge BHPS and Understanding Society (UKHLS)},
  howpublished = {\url{http://www.parisschoolofeconomics.eu/docs/vandendriessche-damien/bhps_ukhls.zip}},
  year = {2015}
}

@TechReport{GustavssonOsterholm2010,
  author={Gustavsson, Magnus and Oesterholm, Paer},
  title={{Does the Labor-Income Process Contain a Unit Root? Evidence from Individual-Specific Time Series}},
  year=2010,
  month=Dec,
  institution={Uppsala University, Department of Economics},
  type={Working Paper Series, Center for Labor Studies},
  url={https://ideas.repec.org/p/hhs/uulswp/2010_019.html},
  number={2010:19},
  abstract={Employing econometric methods for univariate time series, this paper investigates the empirical validity of assuming a unit root in individuals’ labor-income processes. Using a Swedish register-based longitudinal dataset which allows us to follow a cohort of workers from 1968 to 2005, we are able to obtain distributions of median unbiased estimates of localto- unity parameters. The results indicate that earnings for the representative worker are governed by a process where shocks to earnings have fairly high persistence but are both economically and statistically significantly different from having permanent effects; that is, the largest autoregressive root is less than unity. These results add to the studies that question the heavy use of unit-root processes for earnings in calibrations of life-cycle models.},
  keywords={Idiosyncratic income risk; Unit-root model; Earnings dynamics; Local-to-unity parameter},
  doi={},
}