household heterogeneity
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2021 ◽  
pp. 1-45
Author(s):  
Mary A. Burke ◽  
Ali Ozdagli

Abstract Recent research offers mixed results concerning the relationship between inflation expectations and consumption, using qualitative measures of readiness to spend. We revisit this question using survey panel data of actual spending from the U.S. between 2009 and 2012 that also allows us control for household heterogeneity. We find that durables spending increases with expected inflation only for selected types of households while nondurables spending does not respond to expected inflation. Moreover, spending decreases with expected unemployment. These results imply a limited stimulating effect of inflation expectations on aggregate consumption, which could be reversed if inflation and unemployment expectations move together.


2021 ◽  
pp. 1-36
Author(s):  
Fergus Cumming ◽  
Paul Hubert

Abstract We investigate whether the dynamic response of aggregate consumption to monetary policy depends on the distribution of household debt relative to income. Using UK loan-level micro-data, we propose a novel approach to isolate the fraction of households with a limited ability to smooth consumption. By exploiting time and cross-sectional variation, we show that consumption responds more to monetary policy when the share of highly-indebted households is large, but find no state-contingency with respect to the overall level of debt-to-income. Our results highlight the role of household heterogeneity for understanding monetary transmission to aggregate consumption.


2021 ◽  
Vol 9 ◽  
Author(s):  
Xuetao Sun ◽  
Zhenhua Wang

Global warming has caused concern among countries worldwide. Since 2010, the Chinese government has implemented low-carbon pilot policies (LCPPs) in some regions to control carbon emissions. To evaluate the implementation effects of the LCPPs, we matched China’s macro data with Chinese household financial survey data. Specifically, we used a OLS model for assessing the impact of LCPPs on China’s household carbon emissions and conducted heterogeneous analysis. Further, we evaluated the mechanism through which LCPPs affect the carbon emissions of Chinese households. The research results yielded three main findings. (1) LCPPs can promote a reduction in household carbon emissions; however, the impact of LCPPs on household carbon emissions exhibits a time lag. (2) LCPPs reduce household carbon emissions by promoting the upgradation of the household consumption structure. The LCPP enables households to reduce consumption of products involving high levels of carbon emissions, while increasing consumption of low-carbon emission products, thereby affecting total household carbon emissions. (3) An analysis of household heterogeneity revealed that LCPPs mainly affect household carbon emissions in the country’s eastern and central regions, especially urban households’ carbon emissions. This paper describes the implementation effects of LCPPs and suggests a viable path for the further implementation of LCPPs.


2021 ◽  
pp. 1-32
Author(s):  
Shu-Hua Chen

It has been shown that progressive income taxation may stabilize an otherwise standard representative-agent real business cycle model with an indeterminate steady state against aggregate fluctuations caused by agents’ animal spirits. By contrast, within an identical model that allows for sustained economic growth, progressive taxation could lead to equilibrium indeterminacy and sunspot-driven fluctuations. In the context of household heterogeneity that gives rise to income and asset inequality, the fiscal authority has (at least) two options of setting the baseline level of taxable income: (i) the economy-wide average level of income and (ii) the economy’s steady-state level of per capita income. I show that the adoption of a fiscal rule (i) invalidates the effects that a progressive tax can exert on the model’s local stability properties. Progressive income taxation thus no longer operates as an automatic stabilizer that mitigates belief-driven cyclical fluctuations in a no-growth economy, nor as an automatic destabilizer that leads to local indeterminacy in a sustained-growth economy. If a tax policy rule (ii) is instead adopted, then the existing literature’s findings of the (de)stabilizing roles of progressive taxation are robust to the inclusion of household heterogeneity.


2021 ◽  
pp. 016001762199463
Author(s):  
Peter W. J. Batey ◽  
Geoffrey J. D. Hewings

This paper focuses on progress in achieving greater integration between demographic and economic components in system-wide modeling. It underlines the importance of Czamanski’s Baltimore model as well as other influential research based on the two-sector economic base model, before proceeding to review more complex, spatially-disaggregated economy-wide models. The subsequent work of Ledent, Schinnar and others is presented as the foundation for some important initiatives that centered on the Batey-Madden model and its derivatives. Attention is directed to some recent advances in the Batey-Madden model and subsequent work addressing household heterogeneity in the context of income formation and distribution associated with contributions by Miyazawa. The paper explores some avenues for integration of activity analysis and household disaggregation based on income, age or skill endowments to enhance the understanding of the role that households play in the economy.


2021 ◽  
pp. 23-30
Author(s):  
Parneet Pahwa ◽  
Nanda Kumar ◽  
B. P. S. Murthi

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