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| Main Authors: | , , |
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| Format: | Preprint |
| Published: |
2024
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| Subjects: | |
| Online Access: | https://arxiv.org/abs/2411.12655 |
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| _version_ | 1866917841382408192 |
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| author | Huber, Florian Marcellino, Massimiliano Tornese, Tommaso |
| author_facet | Huber, Florian Marcellino, Massimiliano Tornese, Tommaso |
| contents | We study the distributional implications of uncertainty shocks by developing a model that links macroeconomic aggregates to the US distribution of earnings and consumption. We find that: initially, the fraction of low-earning workers decreases, while the share of households reporting low consumption increases; at longer horizons, the fraction of low-income workers increases, but the consumption distribution reverts to its pre-shock shape. While the first phase reduces income inequality and increases consumption inequality, in the second stage income inequality rises, while the effects on consumption inequality dissipate. Finally, we introduce Functional Local Projections and show that they yield similar results. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2411_12655 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | The Distributional Effects of Economic Uncertainty Huber, Florian Marcellino, Massimiliano Tornese, Tommaso General Economics Economics We study the distributional implications of uncertainty shocks by developing a model that links macroeconomic aggregates to the US distribution of earnings and consumption. We find that: initially, the fraction of low-earning workers decreases, while the share of households reporting low consumption increases; at longer horizons, the fraction of low-income workers increases, but the consumption distribution reverts to its pre-shock shape. While the first phase reduces income inequality and increases consumption inequality, in the second stage income inequality rises, while the effects on consumption inequality dissipate. Finally, we introduce Functional Local Projections and show that they yield similar results. |
| title | The Distributional Effects of Economic Uncertainty |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2411.12655 |