The paper studies Germany's temporary 3 percentage-point VAT cut from July 1 to December 31, 2020 (standard rate 19%→16%, reduced rate 7%→5%), combining two causal identification strategies with …
Becker and Murphy develop a theory in which addiction -- even strong addiction to alcohol, cigarettes, or heroin -- is the outcome of a consistent, forward-looking plan to maximize utility over time, …
A one-parameter-family utility function nests time-separable preferences, "catching up with the Joneses" (utility depends on own consumption relative to lagged aggregate consumption per capita) and …
PublishedJournal of Monetary EconomicsPublished Jul 2025
Households are exposed to different rates of inflation because they buy different things, and using anonymised quarterly bank-account records for 89,507 individuals at one of Estonia's leading …
PublishedClassicJournal of International EconomicsPublished Nov 1993
Nontraded goods had been invoked to explain several international puzzles at once -- persistent deviations from purchasing power parity, low cross-country consumption correlations, and real interest …
PublishedClassicQuarterly Journal of EconomicsPublished Aug 2017
This 2017 *Quarterly Journal of Economics* paper (circulated as NBER Working Paper 17583, November 2011) asks how an economy adjusts when households' ability to borrow is suddenly and permanently …
This paper builds a tractable model of an economy populated by finitely lived agents -- each facing a constant instantaneous probability of death p, with new cohorts continuously born -- and uses it …
If households form habits over individual goods rather than over a consumption aggregate, the demand a firm faces depends on its own past sales, its pricing problem becomes dynamic, and mark-ups turn …
This paper tests the life-cycle/permanent-income hypothesis (LC/PIH) using payments from the Alaska Permanent Fund Dividend (PFD), which are large, regular, and known roughly six months before Alaskan …
PublishedClassicQuarterly Journal of EconomicsPublished Feb 2002
Using a panel of about 24,000 individual bankcard accounts from several large U.S. card issuers (January 1995-January 1998), Gross and Souleles test whether consumer debt responds to changes in credit …
Standard optimising consumption models make spending jump on impact when a shock hits, which the data flatly contradict; replacing time-separable utility with habit formation gives consumers a motive …
By building three nested HANK economies and then constructing a deliberately simple two-agent counterpart for each, this paper argues that what household heterogeneity does to aggregate output can be …
Adding habit formation in consumption to an optimising sticky-price model changes both the IS curve and the Phillips curve, makes the variance of output itself -- not only the output gap -- …
In a calibrated stochastic growth model where a continuum of households face partially uninsurable employment risk and can self-insure only by holding aggregate capital, the macroeconomic aggregates …
PublishedClassicQuarterly Journal of EconomicsPublished Nov 1999
This paper modifies the neoclassical (Ramsey) growth model so that the household's instantaneous rate of time preference can vary with the time distance to the date being valued, following the …
Letting a fraction of consumers and price setters replace optimisation with a backward-looking rule of thumb adds endogenous persistence to output and inflation, changes how shocks travel through a …
PublishedClassicBrookings Papers on Economic ActivityPublished Jan 1998
This paper builds the first calibrated life-cycle simulation model of "hyperbolic" consumers -- whose discount rates decline with horizon, setting up a conflict between a patient long-run self and an …
This paper shows that if consumers maximize expected lifetime utility subject to an intertemporal budget constraint under uncertain future earnings -- the standard life cycle-permanent income model -- …
PublishedClassicJournal of Economic LiteraturePublished Nov 2008
This 2008 Journal of Economic Literature survey reviews the methodological developments that, in the author's view, have overturned the older consensus that oil and energy price shocks are simply …
PublishedClassicJournal of Economic PerspectivesPublished Aug 2001
This 2001 Journal of Economic Perspectives paper by George-Marios Angeletos, David Laibson, Andrea Repetto, Jeremy Tobacman, and Stephen Weinberg -- sourced here from the authors' own underlying 2000 …
Online FirstJournal of Political EconomyOnline 31 Aug 2026
Two of the most influential results in optimal tax theory — Saez's (2001) formula for the top income tax rate and Atkinson and Stiglitz's (1976) case for not taxing savings — are usually invoked …