Has the Fraction of Rule-of-Thumb Consumers Changed over Time?
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This paper investigates the time-varying nature of the excess sensitivity of consumption to income. Using a recently proposed estimation method on time-varying parameter models, we have discovered that the excess sensitivity has been gradually decreased over the period of 1953 through 2006 in the US. One potential explanation for this finding is that the gradual developments and improvements in the financial system could have lessened liquidity constraints, such that consumers have become less restricted by their current income level.
Abstract
This paper investigates the time-varying nature of the excess sensitivity of consumption to income. Using a recently proposed estimation method on time-varying parameter models, we have discovered that the excess sensitivity has been gradually decreased over the period of 1953 through 2006 in the US. One potential explanation for this finding is that the gradual developments and improvements in the financial system could have lessened liquidity constraints, such that consumers have become less restricted by their current income level.
참고문헌 (13)
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