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Unanticipated income and consumption in ASEAN countries

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  • J. Thornton
  • P. Molyneux

Abstract

This note tests the rational expectations-permanent income hypothesis for the six ASEAN countries using the methodology developed by Hall and Flavin. The statistical evidence rejects the hypothesis for each country except Singapore.

Suggested Citation

  • J. Thornton & P. Molyneux, 1996. "Unanticipated income and consumption in ASEAN countries," Applied Economics Letters, Taylor & Francis Journals, vol. 3(4), pages 247-249.
    • Handle: RePEc:taf:apeclt:v:3:y:1996:i:4:p:247-249
    DOI: 10.1080/758520873
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. Alan S. Blinder & Angus Deaton, 1985. "The Time Series Consumption Function Revisited," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 465-521.
    3. Kiviet, Jan F., 1985. "Model selection test procedures in a single linear equation of a dynamic simultaneous system and their defects in small samples," Journal of Econometrics, Elsevier, vol. 28(3), pages 327-362, June.
    4. Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
    5. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
    6. Godfrey, Leslie G, 1978. "Testing for Higher Order Serial Correlation in Regression Equations When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1303-1310, November.
    7. John F. O. Bilson, 1981. "The Rational Expectations Approach to the Consumption Function: A Multi-country Study," NBER Chapters, in: International Seminar on Macroeconomics 1979, pages 273-299, National Bureau of Economic Research, Inc.
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