Separability and aggregate shocks in the life-cycle model of consumption: evidence from Spain

M. Dolores Collado

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: The purpose of this paper is to test the life-cycle permanent income hypothesis using an unbalanced panel from the Spanish family expenditure survey. Our model accounts for aggregate shocks and non-separability in the Euler equation among consumption goods, contrary to most of the Literature in this area. Our results do not indicate excess sensitivity of consumption growth to income.

Keywords: Life-cycle; model; Separability; Aggregate; Shocks; Panel; Data (search for similar items in EconPapers)
Date: 1995-11
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:3950

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