Supplement to "Consumption Dynamics During Recessions"

This supplement extends the model to include two features which are particularly important for housing markets: rental markets and collateralized borrowing. It describes the solution for the model with fixed costs in general equilibrium.  It also argues that time-series data on durable spending provides additional support for the theoretical model with fixed costs of durable adjustment. Finally it describes a representative agent version of the durable model with quadratic adjustment costs.

Supplemental Authors: 
Vavra, Joseph -
Berger, David - Northwestern University