Adjustment Costs, Durables, and Aggregate Consumption

Ben Bernanke

No 1038, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Previous tests of the permanent income hypothesis (PIH) have focused on either nondurables or durables expenditures in isolation. This paper studies consumer purchases of nondurables and durables as the outcome of a single optimization problem.It is shown that the presence of adjustment costs of changing durables stocks may substantially affect the time series properties of both components of expenditure under the PIH.However, econometric tests based on this model do not contradict earlier rejections of the PIH in aggregate quarterly data.

Date: 1982-12
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Bernanke, Ben S. "Adjustment Costs, Durables, and Aggregate Consumption." Journal of Monetary Economics, Vol. 15, No. 1, January 1985, pp. 41-68.

Downloads: (external link)
http://www.nber.org/papers/w1038.pdf (application/pdf)

Related works:
Journal Article: Adjustment costs, durables, and aggregate consumption (1985)
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:nbr:nberwo:1038

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w1038

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().