The welfare cost of business cycles for heterogeneous consumersa state-space decomposition

Resumo

The main objective of this paper is to measure the welfare costs related to permanent and transitory shocks for heterogeneous consumers. We use data from the Consumer Expenditure Survey (CEX) and compute the average consumption in three different income groups: low, middle and high income. We sort consumers from the poorest to the richest and we create these three groups using income as a reference. Then, we consider a model where consumers in different groups face different shocks. Our findings indicate that the welfare costs of economic fluctuations are higher than previous works that explore heterogeneous agents argue. Moreover, our estimations indicate that high-income consumers are more sensitive to both transitory and permanent shocks than other classes of consumers.

Ficha do documento

Tipo

Artigo científico

Ano

2017

Instituição

Economics Bulletin

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

Identificador

oai:repositorio.fgv.br:10438/23833

Temas

Economia

Palavras-chave

Time seriesRiskBusiness cyclesHeterogeneous consumersEconomiaCiclos econômicosCrises financeiras