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Testing the Cross-Section Implications of Friedman's Permanent Income Hypothesis

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Author Info
Joseph DeJuan (Department of Economics, University of Waterloo)
John Seater (Department of Economics, North Carolina State University)

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Abstract

We use modern household data and econometric methods to conduct some of the original tests of the Permanent Income Hypothesis (PIH) suggested and used by Friedman (1957). The data and methods are superior to those available to Friedman, allowing us to refine Friedman’s tests and perform tests he could not do. The results provide overall but not universal support for PIH.

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Publisher Info
Paper provided by University of Waterloo, Department of Economics in its series Working Papers with number 04003.

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Date of creation: Jan 2004
Date of revision: Jan 2004
Handle: RePEc:wat:wpaper:04003

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Postal: Waterloo, Ontario, N2L 3G1
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