Arbeitspapier
Buffer-stock saving in a Krusell-Smith world
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.
- Sprache
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Englisch
- Erschienen in
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Series: ECB Working Paper ; No. 1633
- Klassifikation
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Wirtschaft
Consumer Economics: Empirical Analysis
Personal Income, Wealth, and Their Distributions
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Macroeconomics: Consumption; Saving; Wealth
- Thema
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aggregate uncertainty
household income process
wealth inequality
- Ereignis
-
Geistige Schöpfung
- (wer)
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Carroll, Christopher D.
Slacalek, Jiri
Tokuoka, Kiichi
- Ereignis
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Veröffentlichung
- (wer)
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European Central Bank (ECB)
- (wo)
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Frankfurt a. M.
- (wann)
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2014
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:21 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Carroll, Christopher D.
- Slacalek, Jiri
- Tokuoka, Kiichi
- European Central Bank (ECB)
Entstanden
- 2014