VIENNA JOINT ECONOMICS SEMINAR	INVITATION
R E M I N D E R The University of Vienna and the Institute for Advanced Studies cordially invite you to the following Vienna Joint Economics Seminar Thursday, October 12, 2017 University of Vienna, Oskar-Morgenstern-Platz 1, 1090 Vienna, VGSE seminar room, 3rd floor 1:15 pm Filip Rozsypal Danmarks Nationalbank Overpersistence Bias in Individual Income Expectations and its Aggregate Implications Abstract: Using micro level data, we document a systematic, income-related component in household income forecast errors. These errors can be explained by a modest deviation from rational expectations, where agents overestimate the persistence of their income process. This bias has two effects. First, low income households with this bias are too pessimistic and hence choose to borrow less than their fully rational counterparts even though their borrowing constraint is not binding. This allows a quantitative model to match the joint distribution of liquid assets and income. Second, the bias alters the distribution of marginal propensities to consume which makes government stimulus policies less effective. (joint with Kathrin Schlafmann) We are looking forward to seeing you! Institute for Advanced Studies Josefstädter Straße 39, 1080 Vienna, Austria Tel.: +43 1 599 91 250 e-Mail: economics@ihs.ac.at http://www.ihs.ac.at		LINKS DIRECTIONS TO UNIVERSITY OF VIENNA on Google maps VIENNA JOINT ECONOMICS SEMINAR on Google calendar ECONOMICS SEMINARS IN VIENNA on Google calendar
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