Aggregate Consumer's Expenditure and Income
The following question is analyzed: under what circumstances can one a stable (i.e., time invariant) functional relationship which links aggregate consumption in period t with aggregate income in period t and another "determinants" of consumtion that refer to periods prior to period t and can be derived from observable distributions of households' characteristics ? The basic hypothesis on which our model is built is the hypothes of a "structurally stable" evolution. This hypothesis has good empirical support. The proposed dynamic model of consumer's expenditure implies implies the observed regularities of aggregate consumption and income data such as the high linear association of aggregate income and consumption for short-run time series. The compatibility of our model with empirical data and its predictive power is discussed using time- series of cross-section data, the U.K. Family Expenditure Survey from 1968 to 84.
|Length:||40 pages plus pictures|
|Date of creation:||Oct 1994|
|Note:||This paper consists of two parts, the first is the written part and the second are the graphs which belong to the written part and without which the written part is not understandable. The graph part ist available under the URL ftp://hannibal.econ3.uni-bonn.de/sfb- papers/with2/sfb_a456/ It will be needed a free space of approx. 20 MByte on the harddisk. If there occur any problems please don't hesitate to contact us via e-mail firstname.lastname@example.org .|
|Contact details of provider:|| Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany|
Fax: +49 228 73 6884
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References listed on IDEAS
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- HÄRDLE, Wolfgang & JERISON, Michael, "undated".
"Cross section Engel curves over time,"
CORE Discussion Papers RP
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- Haerdle,Wolfgang Jerison,Michael, 1988. "Cross section Engel curves over time," Discussion Paper Serie A 160, University of Bonn, Germany.
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- Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-692, December.
- Maddison, Angus, 1992. " A Long-Run Perspective on Saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 181-196.
- Maddison, A., 1991. "A Long Run Perspective on Saving," Papers 443, Groningen State, Institute of Economic Research-.
- Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, October.
- Spanos, Aris, 1989. "Early Empirical Findings on the Consumption Function, Stylized Facts or Fiction: A Retrospective View," Oxford Economic Papers, Oxford University Press, vol. 41(1), pages 150-169, January. Full references (including those not matched with items on IDEAS)
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