Consumption function: nondurable and durable goods

Fábio Gomes ()
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Fábio Gomes: University of São Paulo, Department of Economics, FEA-RP

Economics Bulletin, 2022, vol. 42, issue 2, 965 - 970

Abstract: Modeling the consumption of nondurable and durable goods separately is equivalent to assuming that consumers` resources exclusively finance one category of goods. To overcome this problem, I modelled these decisions jointly. Not by chance, the new consumption functions for nondurable and durable goods depend not only on consumers` resources, but also on the lagged stock of durable goods.

Keywords: Consumption function; nondurable goods; durable goods; consumption persistence (search for similar items in EconPapers)
JEL-codes: D1 E2 (search for similar items in EconPapers)
Date: 2022-06-30
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