ECON 350
Household Finance Spring 2025
Division II

Household decisions about borrowing, saving, investment, housing, and labor supply have major implications for the financial system and the behavior of the economy as a whole. This was perhaps most vividly illustrated by the roles of household borrowing and spending in the Global Financial Crisis. But household finance is also central to understanding some of the most important current topics in economics and policy research, including wealth inequality, inflation, Social Security and pension reform, health care, and macroeconomic policy. This class applies both theory and empirical evidence to investigate some of the most important household decisions and their role in shaping the macroeconomy. We will begin with a study of household savings and portfolio choice, with an emphasis on some of the ways that real-world behavior departs from the assumptions of full rationality and complete information. We will then apply this framework to study a range of topics, including fiscal and monetary policy, government debt, inflation expectations, student loans, housing leverage, social insurance, and inequality.