Rácz, Z. (2017). Fiscal policy in the presence of an illiquid asset and household heterogeneity [Master Thesis, Technische Universität Wien]. reposiTUm. https://doi.org/10.34726/hss.2017.46246
The effect of fiscal policy greatly depends on how households react to different income shocks. In this paper, utilizing the model of Violante et al. (2015), I investigate the effects of several fiscal policy measures in the presence of heterogeneity among households who save in two kinds of assets, including an illiquid asset subject to adjustment costs.