The talk will be delivered by The University of Sydney faculty Prof. Aarti Singh
11 July, 2022, Bengaluru: The Office of Research and Publications (R&P) at IIM Bangalore will host a seminar titled: ‘Marginal Propensities to Consume before and after the Great Recession’, on July 14 (Thursday), 2022, at 4:00 pm, in Classroom P22. The talk will be delivered by Prof. Aarti Singh, The University of Sydney, from the Economics & Social Sciences (ESS) area.
The seminar will be in-person, and all standard Covid protocol will be followed.
About the talk: The research extends a semi-structural model of household income and consumption to allow for dynamic consumption elasticities with respect to transitory income shocks. Likelihood-based inference for the research model accurately estimates consumption insurance against income shocks in simulated data from a life-cycle model with borrowing constraints and captures non-zero transitory consumption responses for constrained households. Applying the model to data from a representative sample of U.S. households, the researchers find that short-run elasticities with respect to transitory income shocks are substantially larger than long-run elasticities. They also find a structural break in the transitory sensitivity of consumption from before to after the Great Recession, implying an increase in the estimated marginal propensity to consume out of transitory income for all households by more than 40%. There is considerable heterogeneity in estimates across households grouped by various balance sheet characteristics, with the significant increase in transitory sensitivity of consumption for all households driven by homeowners with lower levels of liquid wealth. The research estimates also imply large consumption elasticities with respect to house prices, supporting a bigger role of the deterioration in housing wealth for liquidity-constrained homeowners than deleveraging in explaining the fall in consumption during the Great Recession.
About the speaker: Aarti Singh is an Associate Professor in the School of Economics at The University of Sydney. She earned her PhD in Economics from Washington University in St. Louis (US). Her current research examines various macroeconomic issues such as the impact of monetary policy on the labour market, the macroeconomic consequences of Superannuation, structural change and intergenerational mobility, and developed precise methods to estimate income risk and its impact on consumption. She has published her research in journals such as the Journal of Monetary Economics, International Economic Review, and the Journal of Applied Econometrics.
Website: https://www.sydney.edu.au/arts/about/our-people/academic-staff/aarti-singh.html
The talk will be delivered by The University of Sydney faculty Prof. Aarti Singh
11 July, 2022, Bengaluru: The Office of Research and Publications (R&P) at IIM Bangalore will host a seminar titled: ‘Marginal Propensities to Consume before and after the Great Recession’, on July 14 (Thursday), 2022, at 4:00 pm, in Classroom P22. The talk will be delivered by Prof. Aarti Singh, The University of Sydney, from the Economics & Social Sciences (ESS) area.
The seminar will be in-person, and all standard Covid protocol will be followed.
About the talk: The research extends a semi-structural model of household income and consumption to allow for dynamic consumption elasticities with respect to transitory income shocks. Likelihood-based inference for the research model accurately estimates consumption insurance against income shocks in simulated data from a life-cycle model with borrowing constraints and captures non-zero transitory consumption responses for constrained households. Applying the model to data from a representative sample of U.S. households, the researchers find that short-run elasticities with respect to transitory income shocks are substantially larger than long-run elasticities. They also find a structural break in the transitory sensitivity of consumption from before to after the Great Recession, implying an increase in the estimated marginal propensity to consume out of transitory income for all households by more than 40%. There is considerable heterogeneity in estimates across households grouped by various balance sheet characteristics, with the significant increase in transitory sensitivity of consumption for all households driven by homeowners with lower levels of liquid wealth. The research estimates also imply large consumption elasticities with respect to house prices, supporting a bigger role of the deterioration in housing wealth for liquidity-constrained homeowners than deleveraging in explaining the fall in consumption during the Great Recession.
About the speaker: Aarti Singh is an Associate Professor in the School of Economics at The University of Sydney. She earned her PhD in Economics from Washington University in St. Louis (US). Her current research examines various macroeconomic issues such as the impact of monetary policy on the labour market, the macroeconomic consequences of Superannuation, structural change and intergenerational mobility, and developed precise methods to estimate income risk and its impact on consumption. She has published her research in journals such as the Journal of Monetary Economics, International Economic Review, and the Journal of Applied Econometrics.
Website: https://www.sydney.edu.au/arts/about/our-people/academic-staff/aarti-singh.html