This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Unemployment and Consumption in Chile Author info | Abstract | Publisher info | Download info | Related research | Statistics Claudio Soto
Additional information is available for the following
registered author(s):
This article presents an empirical study of the effect of unemployment on aggregate consumption of non-durable goods in Chile (1990-2002). Using an error-correction model, the results show that unemployment lags have a negative and statistically significant sort-run impact on consumption growth. Three hypotheses that relate unemployment and consumption are also analyzed. First, it is shown that unemployment is not a good predictor of future disposable income. Therefore, it does not signal changes in permanent income. Moreover, the results do not support the implications of the certainty-equivalence version of the permanent income hypothesis. Second, there is evidence that unemployment affects income volatility. Hence, the relationship between unemployment and consumption could be explained by the precautionary savings motive. However, for this mechanism to be consistent with the fact that unemployment has a negative impact on consumption growth, the effect of uncertainty on consumption must be persistent. Finally, there is also evidence that unemployment could affect consumption through its effect on income distribution. However, the latter result is not robust.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number
258.
Download reference. The following formats are available: HTML ,
plain text ,
BibTeX ,
RIS (EndNote),
ReDIF
Length:
Date of creation: May 2004Date of revision:
Handle: RePEc:chb:bcchwp:258Contact details of provider: Postal: Casilla No967, Santiago Phone: (562) 670 2000 Fax: (562) 698 4847 Web page: http://www.bcentral.cl/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Claudio Sepulveda).
Keywords: Other versions of this item:
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Caballero, Ricardo J., 1990.
"Consumption puzzles and precautionary savings ,"
Journal of Monetary Economics ,
Elsevier, vol. 25(1), pages 113-136, January.
[Downloadable!] (restricted)
Martin Browning & Annamaria Lusardi, 1996.
"Household Saving: Micro Theories and Micro Facts ,"
Discussion Papers
96-01, University of Copenhagen. Department of Economics.
Other versions: Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 1999.
"Unemployment risk and precautionary wealth: evidence from households' balance sheets ,"
Finance and Economics Discussion Series
1999-15, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!]
Other versions:
Christopher D Carroll & Karen E Dynan & Spencer D Krane, 1999.
"Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets ,"
Economics Working Paper Archive
416, The Johns Hopkins University,Department of Economics.
Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 2003.
"Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets ,"
The Review of Economics and Statistics ,
MIT Press, vol. 85(3), pages 586-604, 05.
[Downloadable!] (restricted) Karen E. Dynan, 1993.
"How prudent are consumers? ,"
Working Paper Series / Economic Activity Section
135, Board of Governors of the Federal Reserve System (U.S.).
Lusardi, Annamaria, 1998.
"On the Importance of the Precautionary Saving Motive ,"
American Economic Review ,
American Economic Association, vol. 88(2), pages 449-53, May.
[Downloadable!] (restricted)
Oriana Bandiera & Gerard Caprio & Patrick Honohan & Fabio Schiantarelli, 2000.
"Does Financial Reform Raise or Reduce Saving? ,"
The Review of Economics and Statistics ,
MIT Press, vol. 82(2), pages 239-263, May.
[Downloadable!] (restricted)
Other versions: Lusardi, Annamaria, 1997.
"Precautionary saving and subjective earnings variance ,"
Economics Letters ,
Elsevier, vol. 57(3), pages 319-326, December.
[Downloadable!] (restricted)
John Y. Campbell & N. Gregory Mankiw, 1990.
"Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence ,"
NBER Working Papers
2924, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Klaus Schmidt-Hebbel & Luis Serven, 2000.
"Policy Shifts and External Shocks in Chile Under Rational Expectations ,"
Econometric Society World Congress 2000 Contributed Papers
1098, Econometric Society.
[Downloadable!]
Christopher D. Carroll, 1992.
"The Buffer-Stock Theory of Saving: Some Macroeconomic Evidence ,"
Brookings Papers on Economic Activity ,
Economic Studies Program, The Brookings Institution, vol. 23(1992-2), pages 61-156.
[Downloadable!]
Andrea Butelmann & Francisco Gallego, 2001.
"Estimaciones de los Determinantes del Ahorro Voluntario de los Hogares en Chile (1988 Y 1997) ,"
Working Papers Central Bank of Chile
97, Central Bank of Chile.
[Downloadable!]
Zeldes, Stephen P, 1989.
"Consumption and Liquidity Constraints: An Empirical Investigation ,"
Journal of Political Economy ,
University of Chicago Press, vol. 97(2), pages 305-46, April.
[Downloadable!] (restricted)
Other versions: Acemoglu, Daron & Scott, Andrew, 1994.
"Consumer Confidence and Rational Expectations: Are Agents' Beliefs Consistent with the Theory? ,"
Economic Journal ,
Royal Economic Society, vol. 104(422), pages 1-19, January.
[Downloadable!] (restricted)
Other versions: Christopher D. Carroll & Andrew A. Samwick, 1998.
"How Important Is Precautionary Saving? ,"
The Review of Economics and Statistics ,
MIT Press, vol. 80(3), pages 410-419, August.
[Downloadable!] (restricted)
Other versions: Christopher D. Carroll & Wendy E. Dunn, 1997.
"Unemployment Expectations, Jumping (S,s) Triggers, and Household Balance Sheets ,"
NBER Working Papers
6081, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Christopher D Carroll & Wendy E Dunn, 1997.
"Unemployment Expectations Jumping (Ss) Triggers and Household Balance Sheets ,"
Economics Working Paper Archive
386, The Johns Hopkins University,Department of Economics.
Christopher D. Carroll & Wendy Dunn, 1997.
"Mathematica code for Unemployment Expectations, Jumping (S,s) Triggers, and Household Balance Sheets ,"
QM&RBC Codes
42, Quantitative Macroeconomics & Real Business Cycles.
[Downloadable!] Herman Bennett & Norman Loayza & Klaus Schmidt-Heb, 2000.
"Un Estudio del Ahorro Agregado por Agentes Económicos en Chile ,"
Working Papers Central Bank of Chile
85, Central Bank of Chile.
[Downloadable!]
Carroll, Christopher D. & Samwick, Andrew A., 1997.
"The nature of precautionary wealth ,"
Journal of Monetary Economics ,
Elsevier, vol. 40(1), pages 41-71, September.
[Downloadable!] (restricted)
Other versions: Davidson, James E H, et al, 1978.
"Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom ,"
Economic Journal ,
Royal Economic Society, vol. 88(352), pages 661-92, December.
[Downloadable!] (restricted)
Dynan, Karen E, 1993.
"How Prudent Are Consumers? ,"
Journal of Political Economy ,
University of Chicago Press, vol. 101(6), pages 1104-13, December.
[Downloadable!] (restricted)
Malley, James R & Moutos, Thomas, 1996.
"Unemployment and Consumption ,"
Oxford Economic Papers ,
Oxford University Press, vol. 48(4), pages 584-600, October.
[Downloadable!] (restricted)
Full
references
Access and
download statistics Did you know? Over five million full texts a year are downloaded through IDEAS.
This page was last updated on 2008-9-28.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .