Kathrin Schlafmann

Welcome to my home page!

I'm an Assistant Professor at the Institute for International Economic Studies (IIES) in Stockholm, an Assistant Professor at the Copenhagen Business School (Department of Finance) and a Research Affiliate of the Centre for Economic Policy Research (CEPR). I work in the area of Household Finance and Macroeconomics, often touching on Behavioral Macro.

Contact Details

Institute for International Economic Studies
Stockholm University
SE-10691 Stockholm

Upcoming Presentations

July 13:   NBER SI Behavioral Macro
June 19:  CEF Milan
June 11:  Workshop on Uncertainty, Expectation Formation and Aggregate Implications Kiel
May 18:   Mannheim Workshop in Quantitative Macro
May 11:   E1Macro Workshop, Queen Mary London
April 9:    NY Fed


curriculum vitae [pdf]

Research Interests

Household Finance, Macroeconomics, Real Estate, Behavioral Economics

Working Papers

Housing, Mortgages, and Self Control (October 2016)    
Revise & Resubmit Review of Financial Studies, CEPR Discussion Paper 11589

Using a quantitative theoretical framework this paper analyzes how problems of self control influence housing and mortgage decisions. The results show that people with stronger problems of self control are less likely to become home owners, even though houses serve as commitment for saving. The paper then investigates the welfare effects of regulating mortgage products if people differ in their degree of self control. Higher down payment requirements and restrictions on prepayment turn out to be beneficial to people with sufficiently strong problems of self control, even though these policies further restrict access to the commitment device.

Overpersistence Bias in Individual Income Expectations and its Aggregate Implications (with Filip Rozsypal, July 2018)
CEPR Discussion Paper 12028

Using micro level data, we document a systematic, income-related component in household income forecast errors. We show that these errors can be formalized by a modest deviation from rational expectations, where agents overestimate the persistence of their income process but otherwise form expectations in a perfectly rational and forward-looking manner. We then investigate the implications of these distortions in expectations on consumption and saving behavior and find two effects. First, low income households with this bias are too pessimistic and hence choose to borrow less than their fully rational counterparts even though their borrowing constraint is not binding. This allows a quantitative model to match the joint distribution of liquid assets and income. Second, the bias alters the distribution of marginal propensities to consume which makes government stimulus policies less effective.

Work in Progress

Heterogeneous Information Choice in General Equilibrium (with Tobias Broer, Alexandre Kohlhas and Kurt Mitman)


Rules of Thumb in Life-Cycle Saving Decisions (with Joachim Winter and Ralf Rodepeter), Economic Journal, 122, pp.479–501, May 2012 (Matlab code)

We analyse life-cycle saving decisions when households use simple heuristics, or rules of thumb, rather than solve the underlying intertemporal optimisation problem. We simulate life-cycle saving decisions using three simple rules and compute utility losses relative to the solution of the optimisation problem. Our simulations suggest that utility losses induced by following simple decision rules are relatively low. Moreover, the two main saving motives reflected by the canonical life-cycle model – long-run consumption smoothing and short-run insurance against income shocks – can be addressed quite well by saving rules that do not require computationally demanding tasks, such as backwards induction.

last updated: 09 July 2018