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Christopher D. Carroll
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Journal Articles
Publisher: Journals Gateway
The Review of Economics and Statistics (2011) 93 (4): 1135–1145.
Published: 01 November 2011
Abstract
View articletitled, International Evidence on Sticky Consumption Growth
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for article titled, International Evidence on Sticky Consumption Growth
This paper estimates the degree of stickiness in aggregate consumption growth (sometimes interpreted as reflecting consumption habits) for thirteen advanced economies. We find that after controlling for measurement error, consumption growth has a high degree of autocorrelation, with a stickiness parameter of about 0.7 on average across countries. The sticky consumption growth model outperforms the random walk model of Hall (1978) and typically fits the data better than the popular Mankiw (1989) model, though in a few countries, the sticky consumption growth and Campbell-Mankiw models work about equally well.
Includes: Supplementary data
Journal Articles
Publisher: Journals Gateway
The Review of Economics and Statistics (2003) 85 (3): 586–604.
Published: 01 August 2003
Abstract
View articletitled, Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets
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for article titled, Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets
This paper examines precautionary behavior by relating job-loss risk to household net worth. We use existing best practice and some new strategies to deal with some problematic issues inherent in this literature regarding proxying uncertainty, instrumentation, and incorporating theoretical restrictions. We do not find precautionary variation in the wealth holdings of households with low permanent income, but do find precautionary effects for moderate and higher-income households. When the dependent variable is total net worth, these findings are robust to several alternative specifications. But we do not find precautionary responses in subaggregates of wealth that exclude home equity.
Journal Articles
How Important Is Precautionary Saving?
UnavailablePublisher: Journals Gateway
The Review of Economics and Statistics (1998) 80 (3): 410–419.
Published: 01 August 1998
Abstract
View articletitled, How Important Is Precautionary Saving?
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for article titled, How Important Is Precautionary Saving?
We estimate how much of the wealth of a sample of respondents to the Panel Study of Income Dynamics is held because some households face more income uncertainty than others. We begin by solving a theoretical model of saving, which we use to develop appropriate measures of uncertainty. We then regress households' wealth on our measures of uncertainty, and find substantial evidence that households engage in precautionary saving. Finally, we simulate the wealth distribution that our empirical results imply would prevail if all households had the same uncertainty as the lowest uncertainty group. We find that between 32 and 50% of wealth in our sample is attributable to the extra uncertainty that some consumers face compared to the lowest uncertainty group.