International Evidence on Sticky Consumption Growth

Christopher Carroll, Jiri Slacalek and Martin Sommer

The Review of Economics and Statistics, 2011, vol. 93, issue 4, 1135-1145

Abstract: This paper estimates the degree of stickiness in aggregate consumption growth (sometimes interpreted as reflecting consumption habits) for thirteen advanced economies. We find that after controlling for measurement error, consumption growth has a high degree of autocorrelation, with a stickiness parameter of about 0.7 on average across countries. The sticky consumption growth model outperforms the random walk model of Hall (1978) and typically fits the data better than the popular Mankiw (1989) model, though in a few countries, the sticky consumption growth and Campbell-Mankiw models work about equally well. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2011
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Working Paper: International evidence on sticky consumption growth (2008)
Working Paper: International Evidence On Sticky Consumption Growth (2008)
Working Paper: International Evidence on Sticky Consumption Growth (2008)
Working Paper: International evidence on sticky consumption growth (2008)
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