A Direct Test of the Permanent Income Hypothesis with an Application to the U.S. States
AbstractThis paper tests the prediction of the permanent income hypothesis (PIH) that news about future income induce a revision in consumption equal to the revision in permanent income. We use time-series data from 48 contiguous U.S. states to perform the test. The empirical results provide some support for the PIH across states.
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Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 36 (2004)
Issue (Month): 6 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
Other versions of this item:
- Joseph DeJuan & John Seater & Tony Wirjanto, 2003. "A Direct Test of the Permanent Income Hypothesis with an Application to the US States," Working Papers 03001, University of Waterloo, Department of Economics, revised Jan 2003.
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- Ryan R. Brady, 2006.
"Structural Breaks and Consumer Credit: Is Consumption Smoothing Finally a Reality?,"
Departmental Working Papers
13, United States Naval Academy Department of Economics.
- Brady, Ryan R., 2008. "Structural breaks and consumer credit: Is consumption smoothing finally a reality?," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1246-1268, September.
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- Joseph DeJuan & John Seater & Tony Wirjanto, 2006. "Testing the permanent-income hypothesis: new evidence from West-German states ( Länder)," Empirical Economics, Springer, vol. 31(3), pages 613-629, September.
- Liping Gao & Hyeongwoo Kim & Yaoqi Zhang, 2013. "Revisiting the Empirical Inconsistency of the Permanent Income Hypothesis: Evidence from Rural China," Auburn Economics Working Paper Series auwp2013-05, Department of Economics, Auburn University.
- Fabio Augusto Reis Gomes, 2012. "A Direct test of the permanent income hypothesis: the brazilian case," Brazilian Business Review, Fucape Business School, vol. 9(4), pages 87-102, October.
- Amanor-Boadu, Vincent & Zereyesus, Yacob Abrehe & Ross, Kara L., 2009. "Distribution of Local Government Revenue Sources and Citizen Well-Being," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46828, Southern Agricultural Economics Association.
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