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Supplementary data for “Wealth Inequality, Aggregate Consumption, and Macroeconomic Trends under Incomplete Markets”

Principal Investigator(s):  View help for Principal Investigator(s) Byoungchan Lee, Hong Kong University of Science and Technology

Version:  View help for Version V1

Name File Type Size Last Modified
  AttanasioAndPistaferri2014 01/11/2024 01:32:AM
  BPP 01/11/2024 01:40:AM
  ExtractsCSV 01/11/2024 01:42:AM
  Raw 01/11/2024 01:52:AM
PSID_1984_2019.dta application/x-stata-dta 76.9 MB 01/10/2024 08:32:PM
Step001_PSIDDataPreparation.do text/plain 356 bytes 01/10/2024 08:32:PM
Step002_APImputeConsumption.do text/plain 11.4 KB 01/10/2024 08:32:PM
Step003_Convert_dta2csv.do text/plain 12.1 KB 01/10/2024 08:32:PM
Step004_Convert_csv2mat.m text/x-matlab 648 bytes 01/10/2024 08:32:PM
Step005_MergeAPC.m text/x-matlab 2.4 KB 01/10/2024 08:32:PM

Project Citation: 

Lee, Byoungchan. Supplementary data for “Wealth Inequality, Aggregate Consumption, and Macroeconomic Trends under Incomplete Markets” . Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-01-11. https://doi.org/10.3886/E197181V1

Project Description

Summary:  View help for Summary 
I construct an incomplete market model featuring a closed-form expression for optimal consumption. In the model, individual consumption is an isoelastic function of wealth, inclusive of income, yielding partial consumption smoothing based on borrowing and lending in response to income shocks. I show that the model replicates several empirical characteristics of inequality in consumption, income, and wealth and their dynamics at the individual level. Using the model, I show that the rising wealth inequality since the 1980s, induced by an increase in idiosyncratic income risk, has substantially contributed to trend-level changes in real interest rates, capital-to-income ratios, and consumption-to-wealth ratios
Funding Sources:  View help for Funding Sources Hong Kong University of Science and Technology (R9213)

Scope of Project

Subject Terms:  View help for Subject Terms consumption function; wealth inequality; aggregate demand; income process; real interest rates
Geographic Coverage:  View help for Geographic Coverage US
Time Period(s):  View help for Time Period(s) 1983 – 2018


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Published Versions

V2 [2024-06-13]

V1 [2024-01-11]

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