Abstract:
The HKEF is used to estimate household level income shocks and consumption responses for the years 2013-2018. Initial results show that the increase in the growth rate of real wages towards the end of the sample also coincided with an increase in the dispersion of income growth rates. Consumption responses were fairly strong to income shocks, with about 70 percent of permanent income shocks appearing in consumption, which is higher than the MPC found in the literature, but not unexpected in an economy where households balance sheets are recovering from a major crisis.