Permanent Income, Current Income, and Consumption

John Campbell and N. Gregory Mankiw

Journal of Business & Economic Statistics, 1990, vol. 8, issue 3, 265-79

Abstract: This article reexamines the consistency of the permanent-income hypothesis with aggregate postwar U.S. data. The permanent-income hypothesis is nested within a more general model in which a fraction of income accrues to individuals who consume their current income rather than their permanent income. This fraction is estimated to be about 50 percent, indicating a substantial departure from the permanent-income hypothesis. Our results cannot be easily explained by time aggregation for small-sample bias, by managers in the real interest rate, or by nonseparabilities in the utility function of consumers.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (422)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Permanent Income, Current Income, and Consumption (1990)
Working Paper: Permanent Income, Current Income, and Consumption (1987)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bes:jnlbes:v:8:y:1990:i:3:p:265-79

Ordering information: This journal article can be ordered from
http://www.amstat.org/publications/index.html

Access Statistics for this article

Journal of Business & Economic Statistics is currently edited by Jonathan H. Wright and Keisuke Hirano

More articles in Journal of Business & Economic Statistics from American Statistical Association
Bibliographic data for series maintained by Christopher F. Baum ().