Asymmetric Consumption Effects of Transitory Income Shocks* | Zendy

Dimitris Christelis | Zendy; Dimitris Georgarakos | Zendy; Tullio Jappelli | Zendy; Luigi Pistaferri | Zendy; Maarten van Rooij | Zendy

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Asymmetric Consumption Effects of Transitory Income Shocks*

Author(s) -

Dimitris Christelis,

Dimitris Georgarakos,

Tullio Jappelli,

Luigi Pistaferri,

Maarten van Rooij

Publication year - 2019

Publication title -

the economic journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.683

H-Index - 160

eISSN - 1468-0297

pISSN - 0013-0133

DOI - 10.1093/ej/uez013

Subject(s) - economics , consumption (sociology) , permanent income hypothesis , sample (material) , autonomous consumption , monetary economics , econometrics , precautionary savings , demographic economics , macroeconomics , debt , social science , chemistry , chromatography , sociology , market liquidity

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.

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