Excess Smoothness and Durable Goods: Evidence from Subjective Expectations Data

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Excess Smoothness and Durable Goods: Evidence from Subjective Expectations Data

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Mario Padula () (CSEF, University of Salerno, and University College London)

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Mario Padula

Abstract

This paper derives and estimates a model where durable and non-durable consumption are allowed to be non-separable in utility and individuals face a convex adjustment cost whenever they want to purchase a new durable good. Subjective expectations data allow to identify and estimate the marginal propensity to consume out of permanent shocks, which is a key parameter for the understanding of the excess smoothness puzzle and for policy purposes.

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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Salerno, Italy in its series CSEF Working Papers with number 38.

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Date of creation: 01 Mar 2000
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Handle: RePEc:sef:csefwp:38

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Find related papers by JEL classification:
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving

This paper has been announced in the following NEP Reports:

NEP-ALL-2001-11-05 (All new papers)
NEP-MIC-2001-11-05 (Microeconomics)

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Other versions:
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Other versions:
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Other versions:
- Brandolini, A., 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Date Quality, and the Time Pattern of Income Inequality," Papers 350, Banca Italia - Servizio di Studi.
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