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Testing the "Catching up with the Joneses" Model with Consumption Externality in Japan


  • Akihiko Noda

    () (Faculty of Economics, Toyo University)


The purpose of this paper is to test Abel's (1990, 1999) "Catching up with the Joneses" model with a consumption externality using Japanese financial data. It is found that the model is rejected in Japan when it is estimated using generalized empirical likelihood (GEL) estimators.

Suggested Citation

  • Akihiko Noda, 2011. "Testing the "Catching up with the Joneses" Model with Consumption Externality in Japan," Economics Bulletin, AccessEcon, vol. 31(2), pages 1648-1658.
  • Handle: RePEc:ebl:ecbull:eb-11-00299

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    References listed on IDEAS

    1. Neumeyer, Pablo A. & Perri, Fabrizio, 2005. "Business cycles in emerging economies: the role of interest rates," Journal of Monetary Economics, Elsevier, vol. 52(2), pages 345-380, March.
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    3. Gadi Barlevy, 2004. "The Cost of Business Cycles Under Endogenous Growth," American Economic Review, American Economic Association, vol. 94(4), pages 964-990, September.
    4. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    5. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
    6. Rudiger Dornbusch & Juan Carlos de Pablo, 1987. "Argentina: Debt and Macroeconomic Instability," NBER Working Papers 2378, National Bureau of Economic Research, Inc.
    7. Eberly, Janice C., 1997. "International evidence on investment and fundamentals," European Economic Review, Elsevier, vol. 41(6), pages 1055-1078, June.
    8. Reinout De Bock, 2010. "The Composition and Cyclical Behavior of Trade Flows in Emerging Economies," IMF Working Papers 10/46, International Monetary Fund.
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    More about this item


    Habit Formation; Consumption Externality; GEL;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment


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