57See, e.g., Guvenen, Ozkan, and Song (2014) and Blundell, Low, and Preston (2013), and the literature on the ‘scarring’ effect of deep recessions on workers’ lifetime income profiles.
Carroll, Slacalek, and Tokuoka (2014) document that an increase in the variance of transitory income shocks makes the consumption function steeper close to the origin.