International evidence on sticky consumption growth

Christopher Carroll, Jiri Slacalek and Martin Sommer

No 886, Working Paper Series from European Central Bank

Abstract: We estimate 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 auto-correlation, 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 Campbell and Mankiw (1989) model. In several countries, the sticky-consumption-growth and Campbell-Mankiw models work about equally well. JEL Classification: C6, D9, E2

Keywords: consumption dynamics; habit formation; sticky expectations (search for similar items in EconPapers)
Date: 2008-03
Note: 1111765
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp886.pdf (application/pdf)

Related works:
Journal Article: International Evidence on Sticky Consumption Growth (2011)
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)
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:ecb:ecbwps:2008886

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().