Essays In Macroeconomics And Household Finance

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Essays In Macroeconomics And Household Finance

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Author :
language : en
Publisher:
Release Date : 2020

Essays In Macroeconomics And Household Finance written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.

Essays In Macroeconomics And Household Finance

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Author : Eirik E. Brandsaas
language : en
Publisher:
Release Date : 2021

Essays In Macroeconomics And Household Finance written by Eirik E. Brandsaas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.

This dissertation studies how family resources interact with financial constraints in households' savings and investment decisions. The first chapter quantifies the contribution of parental transfers to the homeownership rate of the young. Parents and children interact without commitment in an incomplete markets life-cycle overlapping generations model with housing. Transfers increase homeownership by relaxing borrowing constraints and reducing risks associated with homeownership. Moreover, children with wealthy parents may overinvest in housing to extract larger future transfers from their parents. I find that transfers increase the homeownership rate among households aged 25-44 by 15 p.p. (31%). Finally, I show that policies that reduce sales costs are more effective than relaxing financial constraints or purchase costs at decreasing the role of parental wealth in children's housing outcomes. The second chapter studies whether homeownership can explain the low stock market participation rate in the United States. I first show that the low participation rate is driven by high exit rates among participants and that exit is frequently tied to house purchases. I then extend a workhorse life-cycle model of portfolio choice to include housing. After estimating the models, with and without housing, I find that housing improves model fit. In particular, housing reduces the unexplained participation rate between the model and the data by 71%. Moreover, housing improves model fit by increasing the exit rate among young and middle-aged households and decreasing homeowners' liquid wealth. The third chapter studies the effect of parental wealth on a household's risk-taking in asset and labor markets. Together with my co-authors, we show that households with wealthier parents take more risk in their portfolio and labor market choices. Since risk in one dimension can be offset by choices in other assets, we develop a combined risk measure robust to this concern. Our results have implications on the persistence of wealth across generations and wealth inequality. Our results provide one explanation for the finding that returns to wealth are increasing in wealth since wealth is correlated over generations.

Essays In Household Finance And Macroeconomics

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Author : Franco Zeccchetto
language : en
Publisher:
Release Date : 2017

Essays In Household Finance And Macroeconomics written by Franco Zeccchetto and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Economics categories.

In the first chapter, we analyze the removal of the credit-risk guarantees provided by the Government Sponsored Enterprises (GSEs) in a model with agents heterogeneous in income and house price risk. We find that wealth inequality increases, driven by higher mortgage spreads and housing rents. Housing holdings become more concentrated. Foreclosures fall. The removal benefits high-income households while hurting low and mid-income households (renters and highly leveraged mortgagors with conforming loans). GSE reform requires compensating transfers, sufficiently high elasticity of rental supply, or linking GSE reform with the elimination of the mortgage interest deduction.

Essays In Household Finance And Housing Economics

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Author : Cindy K. Soo
language : en
Publisher:
Release Date : 2013

Essays In Household Finance And Housing Economics written by Cindy K. Soo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.

Essays In Finance And Macroeconomics

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Author : Pedram Jahangiry
language : en
Publisher:
Release Date : 2017

Essays In Finance And Macroeconomics written by Pedram Jahangiry and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.

Essays In Household Finance And Macroeconomics Of Heterogeneous Agents

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Author : Mengli Sha
language : en
Publisher:
Release Date : 2021

Essays In Household Finance And Macroeconomics Of Heterogeneous Agents written by Mengli Sha and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.

This dissertation develops and estimates structural models with heterogeneous agents to understand empirical patterns from micro data that have important aggregate implications. The first two chapters study the aggregate impacts and distributional effects of credit supply shocks from banks and nonbank financial institutions on consumer durable expenditures. Subprime auto lending is concentrated in nonbank lenders. During the Great Recession, nonbank subprime auto lending declined dramatically vis-à-vis banks loans. The first chapter documents these facts and studies in detail how banks and nonbanks offer different loan rate schedules to different borrowers. Motivated by these facts, the second chapter embeds a novel ingredient of endogenous lender choices into a dynamic equilibrium model with heterogeneous households and lenders. The estimated model generates a 21% decline in auto sales triggered by nonbank credit supply shocks and income shocks and attributes approximately 37% of the collapse of the U.S. auto sales during the Great Recession to nonbank credit supply shocks, whereas the contribution of a bank credit supply shock of the same magnitude would have been merely 0.28%. Moreover, this analysis highlights different distributional implications of bank and nonbank credit supply shocks through a new mechanism: asymmetric ability to borrow. This concept captures the limited flexibility in the lender choices of nonbank borrowers, which negatively affects nonbank borrowers' car purchasing behaviors but not those of bank borrowers. Consequently, nonbank credit supply shocks have much larger impacts on durable expenditures, compared to bank shocks. These results cast light on the effectiveness of the Term Asset-Backed Securities Loan Facility (TALF), the emergency lending program that alleviated panic in the asset-backed securities market during the Great Recession: Without this program, auto sales could have dropped substantially more. The third chapter studies the role of overconfidence in households' stock portfolio adjustment decisions. Barber and Odean (2000) find that households who trade stocks more have a lower net return and attribute this pattern to irrationality, specifically overconfidence. In contrast, we find that household financial choices generated from a dynamic optimization problem with rational agents and portfolio adjustment costs can reproduce the observed distribution of household turnover rates as well as the observed pattern that households with the highest turnover rates have the lowest net returns. Various forms of irrationality, modeled as beliefs about income and return processes that are not data based, do not improve the ability of the baseline model to explain these turnover and net return patterns.

Essays In Dynamic Household Finance With Heterogeneous Agents

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Author :
language : en
Publisher:
Release Date : 2008

Essays In Dynamic Household Finance With Heterogeneous Agents written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.

Three Essays In Macroeconomics And Finance

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Author : Yang Li
language : en
Publisher:
Release Date : 2022

Three Essays In Macroeconomics And Finance written by Yang Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.

Chapter 1 develops a continuous-time, heterogeneous agents version of the Barro-Rietz rare disasters model. Following Gabaix (2012), the disaster probability is assumed to be time-varying. The economy consists of two types of agents: (1) a "rational" agent, who updates his beliefs using Bayes Rule, and (2) a "robust" agent, who updates his beliefs using a pessimistically distorted prior. Following Hansen and Sargent (2008), pessimism is disciplined using detection error probabilities. Disaster risk is assumed to be nontradeable. The model is calibrated to US data, and focuses on three disaster episodes: (1) The Great Depression of 1929-33, (2) The Financial Crisis of 2008-09, and (3) The Covid Pandemic of 2020. The key contribution of the paper is to show that the model can replicate the observed spike in trading volume that occurs during disasters. Trading produces endogenous low frequency dynamics in the distribution of wealth. The relative wealth of robust agents gradually declines during normal times, but rises sharply during disasters. These results sound a note of caution when interpreting short-run movements in the distribution of wealth. Chapter 2 examines the market selection hypothesis in a continuous time asset pricing model with jumps. It is shown that the hypothesis is valid when agents have log preferences. The result is robust as it does not depend on whether markets are incomplete. Jumps affect long-run wealth dynamics through a redistribution channel: Disasters lead to large wealth redistribution as agents with heterogeneous beliefs about disasters have different exposures to risky assets. Using tools from ergodic theory, I prove a novel result that generalizes the rationality concept in the existing literature: an agent endowed with the optimal filter will outperform other agents in complete financial markets asymptotically. Chapter 3, a joint paper with Xiaowen Lei, develops a continuous-time overlapping generations model with rare disasters and agents who learn from their own experiences. Using microdata about household finance in China, we establish that economic disasters such as the Great Leap Forward make investors distrustful of the market. Generations that experience disasters invest a lower fraction of their wealth in risky assets, even if similar disasters are not likely to occur again during their lifetimes. "Fearing to attempt" therefore inhibits wealth accumulation by these "depression babies" relative to other generations.

Essays In Macroeconomics Of An Open Economy

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Author : Franz Gehrels
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06

Essays In Macroeconomics Of An Open Economy written by Franz Gehrels and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-06 with Business & Economics categories.

The large aggregates in the economy - consumption, investment, production of the domestic and the international sectors, international capital flows, financial accumulation and indebtedness - are analysed in this book as problems in time-optimisation for enterprises and households. The effects of fiscal and monetary policies along with exchange-rate variation are examined, and their simultaneous use for stabilizing demand are found to be necessary. All household decisions on consumptions, savings, and financial disposition are conditioned by uncertainty, and similarly for firms, who make more complex simultaneous decisions on production, real investment, financing, and market strategy. The marginal efficiency-of-investment function derived from these decisions is fundamentally different from the marginal productivity of capital in the neoclassical sense. An economy which grows through the accumulation of capital, increase in labor supply, and technological progress is the framework in which all of these variables move. This codetermines the allocation of factors between domestic and international production, and the development of foreign trade. The growth both of the public debt and of international investment are treated in depth.

Household Credit Usage

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Author : B. W. Ambrose
language : en
Publisher: Palgrave Macmillan
Release Date : 2007-12-20

Household Credit Usage written by B. W. Ambrose and has been published by Palgrave Macmillan this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-12-20 with Business & Economics categories.

In response to growing interest in household finance, this collection of essays with a foreword by John Y. Campbell, studies household and consumer use of credit instruments. It shows how individual consumers and households utilize various credit alternatives in managing their consumption and savings and suggests areas for future research.