Seminarios
25
Oct
Seminario: “Durable Goods, Borrowing Constraints and Consumption Insurance” (joint with Josep Pijoan-Mas)
Presenta: Enzo Cerletti (Goethe University Frankfurt)
Lugar y hora: Miércoles 25 de Octubre de 2017, 13:00 hrs. Sala P 301, Edificio Placa (Diagonal Paraguay 257)
Abstract
We study the di erent transmission of income shocks into consumption goods of di erent durability. We show that binding borrowing constraints lead to a substitution between goods upon arrival of an unexpected income change. The sign of this substitution depends critically on the persistence of the shock, whereas its size depends on the durability of goods and on their role as collateral for borrowing. An important consequence is that the response of nondurable consumption to income shocks is an imperfect measure of household insurance against labor market risk. We use a life-cycle model with labor market uncertainty and incomplete markets to quantify the actual amount of insurance implied by the observed transmission of income shocks to nondurable consumption. We nd that young households have substantially less insurance against transitory shocks and more insurance against permanent shocks than implied by the transmission of the shocks into nondurable consumption expenditure.
Datos del Seminario
Fecha de inicio:
25 de Octubre, 2017 | 13:00 hrs.
25 de Octubre, 2017 | 13:00 hrs.
Fecha de término
25 de Octubre, 2017 | 14:00 hrs.
