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http://hdl.handle.net/10419/25544
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| Title: | | International evidence on sticky consumption growth  |
| Authors: | | Carroll, Christopher D. Slacalek, Jirka Sommer, Martin |
| Issue Date: | | 2008 |
| Series/Report no.: | | CFS Working Paper 2008/09 |
| Abstract: | | 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. |
| Subjects: | | Sticky Expectations Consumption Dynamics Habit Formation |
| JEL: | | E21 F41 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CFS Working Paper Series, Universität Frankfurt a. M.
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