Identifying heterogeneous income profiles using covariances of income levels and future growth rates
In: Journal of economic dynamics & control, Band 94, S. 24-42
ISSN: 0165-1889
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In: Journal of economic dynamics & control, Band 94, S. 24-42
ISSN: 0165-1889
SSRN
Working paper
In: The economic journal: the journal of the Royal Economic Society, Band 130, Heft 632, S. 2410-2437
ISSN: 1468-0297
AbstractThe degree to which consumers can distinguish persistent from transitory income shocks is paramount for consumption-saving dynamics. In particular, even a small amount of imperfect information causes a severe bias in conventional estimators of the marginal propensity to consume. We provide a novel method that can identify consumers' degree of information by using panel data on income and consumption, even allowing for measurement error. Employing our method to data from the Panel Study of Income Dynamics, we find that households have almost perfect information. This robust result indicates that the conventional estimators of the marginal propensity to consume are on firm ground.
In: Journal of economic dynamics & control, Band 74, S. 87-107
ISSN: 0165-1889
SSRN
In: CEBI Working Paper Series, No. 02/19
SSRN
Working paper
In: Univ. of Copenhagen Dept. of Economics Discussion Paper No. 13/22
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In: CEPR Discussion Paper No. DP16639
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