Families as Shocks

Luis Cubeddu
Authors registered in the RePEc Author Service: José-Víctor Ríos-Rull

No 3924, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this Paper we show the quantitative importance of the process that determines changes in family composition to determine the main macroeconomic magnitudes. We do so by modeling family type as a stochastic process that affects households in a way similar to shocks to earnings. Agents respond to these processes by optimally choosing savings. We show that the size of savings differs dramatically depending on the details of the stochastic process. The model is quantitative: its fundamental parameters are estimated using US data.

Keywords: Families; Savings (search for similar items in EconPapers)
JEL-codes: E20 (search for similar items in EconPapers)
Date: 2003-06
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

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