Over an 18-year period these families would have aggregate incomes
of between $1.1 million and $1.9 million, which helps make the USDA's quarter-million-dollar estimate less daunting.
The impact of imputation in the CE can be seen in table 1, which shows aggregate incomes
, total and by source, from the CE and CPS, along with the ratio of CE-to-CPS estimates for the years 2002-06.
"The steady increase suggests that the rate of decline of payrolls is likely to accelerate further, putting yet more downward pressure on aggregate incomes
," he said.
This liability is computed based on the spouses' aggregate incomes
, deductions, exemptions and credits.
In macro markets, which are tied to aggregate incomes
, asymmetric information is much less of a concern.
Hedging income risks seems to entail shorting one's own country's stock markets in massive amounts, as Baxter and Jermann argue.(2) But we have no assurance that there will be a positive covariance between financial asset returns and returns on claims on aggregate incomes
. Bottazi, Pesenti, and van Wincoop estimate that the covariance has been small and negative for U.S.
This smoothness might suggest that there is little uncertainty about the present value of aggregate incomes
. If the income series is very smooth, then future values can be forecasted very well by pure extrapolation.
Based on the reconciliation method used in this article, about half of the trend difference, or 0.8 percentage points, was caused by different rates of growth in the aggregate incomes
used in each series.