Testing the Permanent Income Hypothesis: The Evidence from Canadian Data

Tony Wirjanto ()

Canadian Journal of Economics, 1991, vol. 24, issue 3, 563-77

Abstract: This paper investigates whether there are variants of the permanent income model that are consistent with seasonally unadjusted quarterly postwar Canadian data. The analysis is based on a misspecification-test equation which nests the standard permanent income model. The results obtained are somewhat unfavorable to the permanent-income hypothesis. The same results also apply to more general models in which the real interest rate is time-varying and the utility function is nonseparable in consumption and the stock of durable goods.

Date: 1991
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Working Paper: Testing the Permanent Income Hypothesis: The Evidence from Canadian Data (1989)
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