![]() That the only asset that can be traded is a risk-free one-period bond. Hall worked in an incomplete markets tradition by assuming Incomplete markets allow a consumer to buy and sell a limited set of securities, often only a single risk-free security. The other is in the incomplete markets tradition of Hall Ĭomplete markets allow a consumer to buy and sell claims contingent on all possible states of the world. One is in the complete markets tradition of Kenneth Arrow This lecture describes two types of consumption-smoothing models. Requirement already satisfied: mpmath>=0.19 in /usr/share/miniconda3/envs/quantecon/lib/python3.10/site-packages/mpmath-1.2.1-p圓.10.egg (from sympy->quantecon) (1.2.1) Requirement already satisfied: urllib3=1.21.1 in /usr/share/miniconda3/envs/quantecon/lib/python3.10/site-packages (from requests->quantecon) (1.26.14) Requirement already satisfied: certifi>=2017.4.17 in /usr/share/miniconda3/envs/quantecon/lib/python3.10/site-packages (from requests->quantecon) (2022.12.7) Requirement already satisfied: charset-normalizer=2 in /usr/share/miniconda3/envs/quantecon/lib/python3.10/site-packages (from requests->quantecon) (2.0.4) Sutthiphisal (2012).Įnvy and Habits: Panel Data Estimates of Interdependent Preferences.Requirement already satisfied: idna=2.5 in /usr/share/miniconda3/envs/quantecon/lib/python3.10/site-packages (from requests->quantecon) (3.4) Review of Economic Studies, 56(July), 357-373.Ĭasado, J. Review of Economic Studies, 61(1), 57-80. Meghir (1994).Ĭonsumer Demand and the Life-Cycle Allocation of Household Expenditures. Technical report, National Bureau of Economic Research.īlundell, R., M. Overborrowing, financial crises and 'macro-prudential' taxes. Simultaneous equations with error components. Varadharajan-Krishnakumar (1987).įull information estimations of a system of simultaneous equations with error component structure. Journal of Economic Literature, 48(September), 693-751.īalestra, P. Journal of Political Economy, 103(6), 1121-1157.Ĭonsumption and saving: models of intertemporal allocation and their implications for public policy. households have committed a rising share of disposable personal income to required principal and interest payments on household debt. Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey. The Review of Economic Studies, 60(3), 631-649.Īttanasio, O. Review of Economic Dynamics, 7(2), 406-435.Ĭonsumption Growth, the Interest Rate and Aggregation. V.Ĭonsumption over the Life Cycle and over the Business Cycle.Īmerican Economic Review, 85(5), 1118-1137. Woodford (Eds.), Handbook of Macroeconomics, Chapter 11, pp. But a new study challenges basic assumptions and illustrates the divergence between financial theory and practical experience. Journal of Applied Econometrics, 24(2), 309-324. Consumption smoothing, the idea that individuals should budget to match savings and spending over their lifetimes, has been the subject of vast academic research. Browning (2009, March).Įstimating Euler equations with noisy data: two exact GMM estimators. O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle EastĪlan, S., O. Item Type:Ĭonsumption Smoothing and Borrowing Constraints: Evidence from Household Surveys of IranĬonsumption Smoothing, Permanent Income Hypothesis, Euler Equation, Excess Sensitivity, Borrowing ConstraintsĬ - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C55 - Large Data Sets: Modeling and Analysisĭ - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysisĭ - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Household Saving Personal FinanceĮ - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption Saving Wealth In the paper, we have also provided estimates of elasticity of inter-temporal substitution for the Iranian households for the first time, and they are consistent with those of other developing countries. This indicates that actual consumption prole is sub-optimal and hence deepening financial access will decrease the welfare loss of this sub-optimality. Our results support the idea that borrowing constraints is the main cause for evidence of excess sensitivity. Excess sensitivity, however, is absent for government employees who have better access to finance due to the structure of labor market and banking system in Iran. We observe evidence of excess sensitivity in a cohort pseudo panel of Iranian households. We use Iranian Household Expenditure and Income Survey," to analyze the dynamics of consumption of the households.
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