Wealth heterogeneity and the response of consumption to shocks

Jiri Slacalek

Research Bulletin, 2013, vol. 19, 10-12

Abstract: How does the distribution of wealth affect consumers’ responses to shocks? A model calibrated to a realistic income process, with both aggregate and household-specific components, and one that matches the empirical wealth distribution suggests that poorer households react strongly to transitory income shocks, consistent with the substantial body of microeconomic evidence. JEL Classification: E2, E3

Keywords: consumption; wealth (search for similar items in EconPapers)
Date: 2013-10
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbrbu:2013:0019:2

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