Asymmetric consumption effects of transitory income shocks

Christelis, D. , Georgarakos, D., Japelli, T., Pistaferri, L. and van Rooij, M. (2019) Asymmetric consumption effects of transitory income shocks. Economic Journal, 129(622), pp. 2322-2341. (doi: 10.1093/ej/uez013)

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We use the responses of a representative sample of Dutch households to survey questions that ask how much their consumption would change in response to unexpected, transitory income shocks (positive or negative). The questionnaire also distinguishes between relatively small income changes (a one-month increase or drop in income), and relatively larger ones (equal to three-months' income). The results are broadly in line with models of intertemporal choice with precautionary saving, borrowing constraints and finite horizons.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Georgarakos, Professor Dimitris and Christelis, Professor Dimitris
Authors: Christelis, D., Georgarakos, D., Japelli, T., Pistaferri, L., and van Rooij, M.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economic Journal
Publisher:Oxford University Press
ISSN (Online):1468-0297
Published Online:17 May 2019

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