⁶As of this writing, the best measurement of household income dynamics is that of DeBacker, Heim, Panousi, Ramnath, and Vidangos (2013), who use newly-available IRS tax data and conclude that the serial correlation of the ‘persistent’ component of household income shocks is about 0.98; close enough to 1 as to be nearly equivalent to a specification with a truly permanent component.