The Testing of Hall's Permanent Income Hypothesis: A Case Study of Iran

Gudarzi Farahani Yazdan and Merabirad Sina

Asian Economic and Financial Review, 2013, vol. 3, issue 3, 311-318

Abstract: The objective of this study is to test the Hall’s permanent income hypothesis for Iran using cointegration and error correction model from annual data covering the period of 1980-2010 using annual data from 1980 to 2010. The basic model of permanent income hypothesis showed the validity of absolute income hypothesis while the Campbell and Mankiw (1990) consumption model suggested that the proportion of forward looking consumers in total population is 34 percent and the remaining consumers are backward looking. Therefore in Iran, there is larger fluctuation in per capita income and small opportunity for consumption smoothing.

Keywords: Permanent income hypothesis; Absolute income hypothesis; Consumption. (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://archive.aessweb.com/index.php/5002/article/view/994/1477 (application/pdf)

Related works:
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:asi:aeafrj:v:3:y:2013:i:3:p:311-318:id:994

Access Statistics for this article

More articles in Asian Economic and Financial Review from Asian Economic and Social Society
Bibliographic data for series maintained by Robert Allen ().