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dc.contributor.authorPischke, Jörn-Steffenen_US
dc.date.accessioned2010-01-12T15:54:52Z-
dc.date.available2010-01-12T15:54:52Z-
dc.date.issued1991en_US
dc.identifier.urihttp://hdl.handle.net/10419/29446-
dc.description.abstractIn this paper I study a model of life-cycle consumption in which individuals react optimally to their own income process but ignore economy wide information. Since individual income is less persistent than aggregate income consumers will react too little to aggregate income variation. Aggregate consumption will be excessively smooth. Since aggregate information is slowly incorporated into consumption, aggregate consumption will be autocorrelated and correlated with lagged income. The second part of the paper provides empirical evidence on individual and aggregate income processes and calibrates the model using the estimated parameters. The mode predictions roughly correspond to the empirical findings for aggregate consumption data. Allowing for the existence of measurement error in micro income, durables, finite lifetimes of consumers, and advance information improves the predictions of the model.en_US
dc.language.isoengen_US
dc.publisherZentrum für Europäische Wirtschaftsforschung (ZEW) Mannheimen_US
dc.relation.ispartofseriesZEW Discussion Papers 91-07en_US
dc.subject.jelE21en_US
dc.subject.ddc330en_US
dc.titleIndividual income, incomplete information, and aggregate consumptionen_US
dc.typeWorking Paperen_US
dc.identifier.ppn256560250en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zewdip:9107-
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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