Variability of Durable and Nondurable Consumption: Evidence for Six O.E.C.D. Countries
AbstractThe author estimates consumption variability ratios for both durable and nondurable consumption using data for six OECD countries. His methodology, which relies on a long-run restriction implied by the consumer's intertemporal budget constraint, overcomes many of the problems inherent to previous approaches. Some important departures from the permanent income model emerge: (1) nondurable consumption shows mild excess smoothness in the United States and Italy, and mild excess volatility in Japan and France, and (2) durable consumption shows extreme excess smoothness in all countries. Alternative factors capable of generating the differences in volatility across types of goods are discussed. Copyright 1993 by MIT Press.
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Bibliographic InfoPaper provided by Columbia - Graduate School of Business in its series Papers with number 92-06.
Length: 26 pages
Date of creation: 1992
Date of revision:
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Postal: U.S.A.; COLUMBIA UNIVERSITY, GRADUATE SCHOOL OF BUSINESS, PAINE WEBBER , New York, NY 10027 U.S.A
Phone: (212) 854-5553
Web page: http://www.columbia.edu/cu/business/
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Other versions of this item:
- Gali, Jordi, 1993. "Variability of Durable and Nondurable Consumption: Evidence for Six O.E.C.D. Countries," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 418-28, August.
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- Christopher J. Erceg & Andrew T. Levin, 2002.
"Optimal Monetary Policy with Durable and Non-Durable Goods,"
Computing in Economics and Finance 2002
343, Society for Computational Economics.
- Christopher J. Erceg & Andrew T. Levin, 2002. "Optimal monetary policy with durable and non-durable goods," International Finance Discussion Papers 748, Board of Governors of the Federal Reserve System (U.S.).
- Erceg, Christopher J. & Levin, Andrew T., 2002. "Optimal monetary policy with durable and non-durable goods," Working Paper Series 0179, European Central Bank.
- Álvarez-Parra, Fernando & Brandao-Marques, Luis & Toledo, Manuel, 2013. "Durable goods, financial frictions, and business cycles in emerging economies," Journal of Monetary Economics, Elsevier, vol. 60(6), pages 720-736.
- Kwamie Dunbar, 2008. "The Impact of the FOMC's Monetary Policy Actions on the growth of Credit Risk: the Monetary Policy - Liquidity Paradox," Working papers 2008-05, University of Connecticut, Department of Economics.
- Charles Engel & Jian Wang, 2007. "International trade in durable goods: understanding volatility, cyclicality, and elastics," Globalization and Monetary Policy Institute Working Paper 03, Federal Reserve Bank of Dallas.
- Jian Wang & Charles Engel, 2008.
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2008 Meeting Papers
210, Society for Economic Dynamics.
- Engel, Charles & Wang, Jian, 2011. "International trade in durable goods: Understanding volatility, cyclicality, and elasticities," Journal of International Economics, Elsevier, vol. 83(1), pages 37-52, January.
- Charles Engel & Jian Wang, 2008. "International Trade in Durable Goods: Understanding Volatility, Cyclicality, and Elasticities," NBER Working Papers 13814, National Bureau of Economic Research, Inc.
- Erik Hjalmarsson & Par Osterholm, 2007. "A residual-based cointegration test for near unit root variables," International Finance Discussion Papers 907, Board of Governors of the Federal Reserve System (U.S.).
- International Monetary Fund, 2011. "Business Cycles in Emerging Markets," IMF Working Papers 11/133, International Monetary Fund.
- Timo Koivumäki, 1996. "Permanent income hypothesis and variability of consumption," Finnish Economic Papers, Finnish Economic Association, vol. 9(2), pages 144-154, Autumn.
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