Econometrica: Jan 2015, Volume 83, Issue 1

Consumption Dynamics During Recessions

https://doi.org/10.3982/ECTA11254
p. 101-154

David Berger and Joseph Vavra



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Supplement to "Consumption Dynamics During Recessions"

This zip file contains the replication files for the manuscript.

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Supplement to "Consumption Dynamics During Recessions"

This supplement extends the model to include two features which are particularly important for housing markets: rental markets and collateralized borrowing. It describes the solution for the model with fixed costs in general equilibrium.  It also argues that time-series data on durable spending provides additional support for the theoretical model with fixed costs of durable adjustment. Finally it describes a representative agent version of the durable model with quadratic adjustment costs.

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