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El Ahorro y el Consumo de Bienes Durables Frente al Ciclo Económico en Chile: ¿Consumismo, Frugalidad, Racionalidad?

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  • Francisco Gallego
  • Felipe Morandé
  • Raimundo Soto

Abstract

This paper studies empirically the relation between household economic saving (including durable good purchases) and the business cycle using Chilean data. The data show that the relation between household saving and the business cycle is given by the durable consumption dynamics.Consequently, a group of econometric regressions are made in order to study the connections between both kinds of goods. This is the first paper that empirically tests the implications of the permanent income hypothesis (PIH) and the liquidity constraint approach. Several interesting results emerge: first, the strong and weak implications of the PIH are rejected; second, liquidity constraints are moderate and affect both durable and non-durable goods; and, third, Chilean consumers do not smooth consumption because liquidity constraints are binding and not because they are non-rational.

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Bibliographic Info

Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 96.

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Date of creation: May 2001
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Handle: RePEc:chb:bcchwp:96

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  1. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
  2. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, October.
  3. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
  4. Christopher D. Carroll & David N. Weil, 1993. "Saving and growth: a reinterpretation," Working Paper Series / Economic Activity Section 140, Board of Governors of the Federal Reserve System (U.S.).
  5. Campbell, John Y & Deaton, Angus, 1989. "Why Is Consumption So Smooth?," Review of Economic Studies, Wiley Blackwell, vol. 56(3), pages 357-73, July.
  6. 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.
  7. Felipe G. Morandé, 1996. "Savings in Chile: What Went Right?," Research Department Publications 4030, Inter-American Development Bank, Research Department.
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Cited by:
  1. Francisco Gallego & Juan-Pablo Montero & Christian Salas, 2011. "The Effect of Transport Policies on Car Use: Theory and Evidence from Latin American Cities," Documentos de Trabajo 407, Instituto de Economia. Pontificia Universidad Católica de Chile..

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