International evidence on sticky consumption growth

  • We estimate the degree of 'stickiness' in aggregate consumption growth (sometimes interpreted as reflecting consumption habits) for thirteen advanced economies. We find that, after controlling for measurement error, consumption growth has a high degree of autocorrelation, with a stickiness parameter of about 0.7 on average across countries. The sticky-consumption-growth model outperforms the random walk model of Hall (1978), and typically fits the data better than the popular Campbell and Mankiw (1989) model. In several countries, the sticky-consumption-growth and Campbell-Mankiw models work about equally well.

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Metadaten
Author:Christopher D. Carroll, Jirka Slacalek, Martin Sommer
URN:urn:nbn:de:hebis:30-54376
URL:http://www.ifk-cfs.de/fileadmin/downloads/publications/wp/08_09.pdf
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2008,09
Series (Serial Number):CFS working paper series (2008, 09)
Document Type:Working Paper
Language:English
Year of Completion:2008
Year of first Publication:2008
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2008/04/11
Tag:consumption dynamics; habit formation; sticky expectations
GND Keyword:Privater Verbrauch
HeBIS-PPN:197750494
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht