38This variant of the model produces similar results to our baseline model with respect to aggregate smoothness.
An alternative approach to calibrating the distribution of β would be to target the distribution of MPCs by liquid wealth quantile, as reported for example by Fagereng, Holm, and Natvik (2017) or Crawley and Kuchler (2018). We also did this, but the results are too similar to the liquid wealth calibration to justify reporting. We get similar (albeit lower) consumption responses when we calibrate the distribution of β to match the distribution of net wealth.