Time Preferences, Intertemporal Optimization, and the Permanent Income-Life Cycle Hypothesis
نویسندگان
چکیده
منابع مشابه
Testing Intertemporal Rational Expectations Model with State Uncertainty: An Application to the Permanent Income Hypothesis
In this paper we take a different modeling approach based on the component driven (CD) model developed in Kuan, Huang, and Tsay (2003) to test the permanent income hypothesis (PIH), an example of intertemporal choice models. A key feature of this approach is that it explicitly allows for state uncertainty. By assuming that the labor income follows a CD process, we show that the agent’s percepti...
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P ersonal consumption expenditures grew by almost 2 percent during 1993 in real, per-capita terms. Real disposable income per capita, meanwhile, actually fell slightly. By definition, households draw down their savings when consumption grows faster than income. In fact, the figures for consumption and income just mentioned underlie a decline in the personal savings rate from over 6 percent in t...
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The Rational Expectations Permanent Income Hypothesis implies that consumption follows a martingale. However, most empirical tests have rejected the hypothesis. Those empirical tests are based on linear models. If the data generating process is non-linear, conventional tests may not assess some of the randomness properly. As a result, inference based on conventional tests of linear models can b...
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ژورنال
عنوان ژورنال: Growth
سال: 2019
ISSN: 2518-0185,2412-2068
DOI: 10.20448/journal.511.2019.61.1.11