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Does consumption respond to predicted increases in cash-hand availability?: Evidence from the Italian "severance pay"

Margherita Borella, Elsa Fornero and Mariacristina Rossi

Economics Letters, 2009, vol. 105, issue 1, 127-129

Abstract: We examine whether Italian household consumption exhibits excess sensitivity to "severance pay", a sizable lump-sum that workers receive at job termination. We find no evidence of excess sensitivity of non-durable expenditure to this anticipated cash-in-hand change.

Keywords: Life-cycle; Euler; equation; Excess; sensitivity; Severance; pay (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Does Consumption Respond to Predicted Increases in Cash-on-hand Availability? Evidence from the Italian “Severance Pay” (2007) Downloads
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