Karen E Dynan
Biographic Data
| ID | 1455216 |
|---|---|
| NAME | Karen E Dynan |
| GIVEN NAMES | Karen E |
| FAMILY NAME | Dynan |
| SIGNATURE | DYNAN K E |
| AFFILIATIONS | Brookings Institution, Washington, D.C. |
| ORCID | 0000-0001-5504-4025 |
| VERIFIED | Yes |
| TOTAL WORKS | 7 |
| TOTAL CITATIONS | 84 |
| AUTHOR COUNT | 7 |
| EDITOR COUNT | 0 |
| FIRST PUBLICATION YEAR | 1993 |
| LATEST PUBLICATION YEAR | 2025 |
| H-INDEX | 3 |
Putting US Fiscal Policy on a Sustainable Path
Even allowing for uncertainty about the future economy, current US fiscal policies are almost certainly unsustainable. Therefore, policymakers must decide when and in what ways to raise taxes and reduce spending to put debt on a lower trajectory. Acting sooner rather than later would increase national savings, broaden the policy options, reduce the chance of a fiscal crisis, and provide fiscal space for responding to adverse developments. The pro…
The Economic Context for Reforming the Safety Net
As we wrestle with the future of our safety net and social insurance programs, it is important to understand not only the features and outcomes associated with individual programs but also the broader economic context. This reflection piece discusses several relevant aspects of the macroeconomy and of economic and financial conditions facing households: rising government debt, slower macroeconomic growth, limited tools to fight future recessions,…
Household Wealth Effects and the US Macroeconomy
The effect of wealth on consumption is an issue of long‐standing interest to economists. Analysts believe that fluctuations in household wealth have driven major swings in economic activity. This essay considers the so‐called “wealth effects”—the impact of changes in wealth on household consumption and the overall macroeconomy. There is an extensive existing literature on wealth effects, but there are also many unanswered issues and questions. Th…
Changing Household Financial Opportunities and Economic Security
Households have experienced an expansion of financial opportunities over the past several decades. Expanded financial opportunities, such as the democratization of credit and new lending approaches, can yield benefits in terms of household economic security. However, the financial crisis that began in 2007 has powerfully illustrated that expanded financial opportunities can also pose dangers for households. By increasing the scope for investment …
Do the Rich Save More
The question of whether higherlifetime income households save a larger fraction of their income was the subject of much debate in the 1950s and 1960s, and while not resolved, it remains central to the evaluation of tax and macroeconomic policies. We resolve this long-standing question using new empirical methods applied to the Panel Study of Income Dynamics, the Survey of Consumer Finances, and the Consumer Expenditure Survey. We find a strong po…
Unemployment Risk and Precautionary Wealth
This paper examines precautionary behavior by relating job-loss risk to household net worth. We use existing best practice and some new strategies to deal with some problematic issues inherent in this literature regarding proxying uncertainty, instrumentation, and incorporating theoretical restrictions. We do not find precautionary variation in the wealth holdings of households with low permanent income, but do find precautionary effects for mode…
How Prudent are Consumers
Using data from the Consumer Expenditure Survey, this paper presents a simple test that provides an explicit estimate of the parameter in the utility function that reflects the strength of the precautionary saving motive, the coefficient of relative prudence. The test yields a fairly precise estimate of a small precautionary motive; in fact, the estimate is too small to be consistent with widely accepted beliefs about risk aversion. The presence …
Do the Rich Save More
The question of whether higherlifetime income households save a larger fraction of their income was the subject of much debate in the 1950s and 1960s, and while not resolved, it remains central to the evaluation of tax and macroeconomic policies. We resolve this long-standing question using new empirical methods applied to the Panel Study of Income Dynamics, the Survey of Consumer Finances, and the Consumer Expenditure Survey. We find a strong po…
Changing Household Financial Opportunities and Economic Security
Households have experienced an expansion of financial opportunities over the past several decades. Expanded financial opportunities, such as the democratization of credit and new lending approaches, can yield benefits in terms of household economic security. However, the financial crisis that began in 2007 has powerfully illustrated that expanded financial opportunities can also pose dangers for households. By increasing the scope for investment …
How Prudent are Consumers
Using data from the Consumer Expenditure Survey, this paper presents a simple test that provides an explicit estimate of the parameter in the utility function that reflects the strength of the precautionary saving motive, the coefficient of relative prudence. The test yields a fairly precise estimate of a small precautionary motive; in fact, the estimate is too small to be consistent with widely accepted beliefs about risk aversion. The presence …
How Prudent are Consumers
Using data from the Consumer Expenditure Survey, this paper presents a simple test that provides an explicit estimate of the parameter in the utility function that reflects the strength of the precautionary saving motive, the coefficient of relative prudence. The test yields a fairly precise estimate of a small precautionary motive; in fact, the estimate is too small to be consistent with widely accepted beliefs about risk aversion. The presence …
Unemployment Risk and Precautionary Wealth
This paper examines precautionary behavior by relating job-loss risk to household net worth. We use existing best practice and some new strategies to deal with some problematic issues inherent in this literature regarding proxying uncertainty, instrumentation, and incorporating theoretical restrictions. We do not find precautionary variation in the wealth holdings of households with low permanent income, but do find precautionary effects for mode…
Do the Rich Save More
The question of whether higherlifetime income households save a larger fraction of their income was the subject of much debate in the 1950s and 1960s, and while not resolved, it remains central to the evaluation of tax and macroeconomic policies. We resolve this long-standing question using new empirical methods applied to the Panel Study of Income Dynamics, the Survey of Consumer Finances, and the Consumer Expenditure Survey. We find a strong po…
Changing Household Financial Opportunities and Economic Security
Households have experienced an expansion of financial opportunities over the past several decades. Expanded financial opportunities, such as the democratization of credit and new lending approaches, can yield benefits in terms of household economic security. However, the financial crisis that began in 2007 has powerfully illustrated that expanded financial opportunities can also pose dangers for households. By increasing the scope for investment …
Household Wealth Effects and the US Macroeconomy
The effect of wealth on consumption is an issue of long‐standing interest to economists. Analysts believe that fluctuations in household wealth have driven major swings in economic activity. This essay considers the so‐called “wealth effects”—the impact of changes in wealth on household consumption and the overall macroeconomy. There is an extensive existing literature on wealth effects, but there are also many unanswered issues and questions. Th…
The Economic Context for Reforming the Safety Net
As we wrestle with the future of our safety net and social insurance programs, it is important to understand not only the features and outcomes associated with individual programs but also the broader economic context. This reflection piece discusses several relevant aspects of the macroeconomy and of economic and financial conditions facing households: rising government debt, slower macroeconomic growth, limited tools to fight future recessions,…
Putting US Fiscal Policy on a Sustainable Path
Even allowing for uncertainty about the future economy, current US fiscal policies are almost certainly unsustainable. Therefore, policymakers must decide when and in what ways to raise taxes and reduce spending to put debt on a lower trajectory. Acting sooner rather than later would increase national savings, broaden the policy options, reduce the chance of a fiscal crisis, and provide fiscal space for responding to adverse developments. The pro…
Economics (6 works) · Financial Literacy, Pension, Retirement Analysis (6 works) · Housing Market and Economics (5 works) · Macroeconomics (4 works) · Monetary economics (4 works) · Public economics (3 works) · Debt (2 works) · Economic policy (2 works) · Finance (2 works) · Finance (2 works)