16A large empirical literature has found that variants of this specification capture well the key features of actual household-level income processes; see Topel (1991), Carroll (1992), Moffitt and Gottschalk (2011), Storesletten, Telmer, and Yaron (2004), Low, Meghir, and Pistaferri (2010), DeBacker, Heim, Panousi, Ramnath, and Vidangos (2013), and many others (see Table 1 in Carroll, Slacalek, and Tokuoka (2015) for a summary).