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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