Conference on Household Heterogeneity and Household Finance
Sponsored by the Deutsche Bundesbank and the Federal Reserve Bank of Cleveland
The financial situation of households is relevant to a wide variety of policy questions, including what happens to household welfare under different policies, how household consumption will respond to macroeconomic fluctuations, and how differing regulatory regimes will affect individual responses to financial market shocks. Recent research has suggested that the answers to such questions are broadly sensitive to distributional assumptions on wealth holdings, earnings potential, portfolio risk (including housing), and other observed characteristics. Empirical work is needed to definitively discuss the models developed in this research, and to date, empirical work has been hindered by a dearth of reliable data on individual household financial conditions, particularly within a dynamic panel setting that would allow accurate measurement of responses to a variety of environments.
New measurement instruments are currently being designed, tested, and deployed in Europe to assess individual household financial conditions. In the U.S., a variety of older data sets are being redesigned to better answer questions that hinge upon household financial heterogeneity. We expect the new data to provide not only more precise empirical measurement for existing models, but also to inspire new models that more realistically assert the relevance of heterogeneous household financial positions.
To provide a forum of discussion on the design and use of individual household financial data in economic modeling, the Federal Reserve Bank of Cleveland and the Deutsche Bundesbank are hosting a conference. The papers and agenda will be posted soon.
Conference Date
The conference will take place on September 9 and 10, 2010, at the Federal Reserve Bank of Cleveland.