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| Tomoaki Yamada |
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| ''Persistence of income shocks and consumption inequality: A case in Japan'' |
| ( 2009, Vol. 29 No.4 ) |
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| The present study investigate the relationship between the persistence of uninsurable income shocks and consumption inequality over a household's life cycle in Japan. Using a life cycle model with incomplete asset markets and calibrated parameters for the Japanese economy, we quantitatively show that moderate persistence of shocks generate a nonlinear consumption inequality profile over the life cycle. The moderate persistence of shocks well replicates the pattern of consumption inequality in Japan. |
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| Keywords: Uninsurable income risk, Consumption inequality |
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
D3 - Distribution: General |
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| Manuscript Received : Oct 12 2009 | | Manuscript Accepted : Nov 09 2009 |
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