Obiettivo Households face large idiosyncratic income risks and use their wealth to self insure. In doing so, they make portfolio choices we can summarize grosso modo as choices between liquid (safe and nominal) and illiquid (risky and real) assets. These choices have the potential to create strong aggregate repercussions as investments in real assets create an immediate demand for goods, while liquid nominal savings only when someone else uses the funds to invest or consume. As a result, portfolio choices are key for economic dynamics and important for the propagation of monetary and fiscal policy. Moreover, household portfolio positions and the liquidity of assets itself become an important determinant of aggregate savings and investment. Yet, they are widely disregarded in standard business cycle models today.The proposed research therefore develops a novel framework that allows us to understand this nexus--a framework that studies business cycles, household portfolios, income risks, and asset liquidity in unison. This new framework allows us to address a wide array of important macroeconomic questions of our time: how wealth inequality and stabilization policies interact, how monetary policy redistributes, how a housing freeze can create a recession as big as the last one, and finally, why crises are particularly severe in times of high household debt.To develop this framework, empirical and theoretical work has to go hand in hand: First, I document the historical movements in the distribution of household (and firm) portfolios to understand how and whose portfolio positions change over the cycle and in response to shocks. Second, I document the cyclical movements in asset liquidity. Third, I develop a theoretical framework that allows us to understand the implications of changes in asset liquidity in a setup with incomplete markets and nominal rigidities. Finally, I make liquidity fluctuations endogenous and augment the model with a structure of overlapping generations. Campo scientifico social scienceseconomics and businesseconomicsmonetary and finances Parole chiave macroeconomics business cycles household portfolios liquidity incomplete markets income risks inequality Programma(i) H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC) Main Programme Argomento(i) ERC-2016-COG - ERC Consolidator Grant Invito a presentare proposte ERC-2016-COG Vedi altri progetti per questo bando Meccanismo di finanziamento ERC-COG - Consolidator Grant Istituzione ospitante RHEINISCHE FRIEDRICH-WILHELMS-UNIVERSITAT BONN Contribution nette de l'UE € 1 277 830,00 Indirizzo REGINA PACIS WEG 3 53113 Bonn Germania Mostra sulla mappa Regione Nordrhein-Westfalen Köln Bonn, Kreisfreie Stadt Tipo di attività Higher or Secondary Education Establishments Collegamenti Contatta l’organizzazione Opens in new window Sito web Opens in new window Partecipazione a programmi di R&I dell'UE Opens in new window Rete di collaborazione HORIZON Opens in new window Costo totale € 1 277 830,00 Beneficiari (1) Classifica in ordine alfabetico Classifica per Contributo netto dell'UE Espandi tutto Riduci tutto RHEINISCHE FRIEDRICH-WILHELMS-UNIVERSITAT BONN Germania Contribution nette de l'UE € 1 277 830,00 Indirizzo REGINA PACIS WEG 3 53113 Bonn Mostra sulla mappa Regione Nordrhein-Westfalen Köln Bonn, Kreisfreie Stadt Tipo di attività Higher or Secondary Education Establishments Collegamenti Contatta l’organizzazione Opens in new window Sito web Opens in new window Partecipazione a programmi di R&I dell'UE Opens in new window Rete di collaborazione HORIZON Opens in new window Costo totale € 1 277 830,00