Sensitivity of consumption to income and to government purchases: some specification and estimation issues

作者: Dimitris Hatzinikolaou

DOI: 10.1080/000368400322390

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摘要: The paper derives a nonlinear error-correction model (ECM) for consumption and shows that existing models are based on quadratic utility, combine permanent income current-income consumption, nest (or could nest) the hypothesis of substitutability between private government purchases special cases ECM. importance some econometric issues have not received proper attention in literature is demonstrated by estimating using US aggregate quarterly data, 1953:1-1992:4. evidence suggests ECM produces more reliable estimates than do restrictive models.

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