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SFB 649 Discussion Papers, HU Berlin >
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http://hdl.handle.net/10419/56678
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| Title: | | Consumption growth and volatility with consumption externalities  |
| Authors: | | Xie, Runli |
| Issue Date: | | 2010 |
| Series/Report no.: | | SFB 649 discussion paper 2010-057 |
| Abstract: | | This paper studies the link between group-specific consumption growth and volatility within a framework of heterogeneous agents, under the assumption of a consumption externality. Household preferences are related to the volatility through asset holding decisions: volatility decreases with groups' degree of patience, and increases with household eagerness to keep up with the group average. Moreover, consumption growth is expected to relate positively to the volatility. This last hypothesis is tested using household data imputed from GSOEP and the German Income and Expenditure Survey (EVS), where a U-shaped relationship is found for the nondurable consumption. Moreover, examining the growth-inequality relationship using EVS data alone shows that it is positive for nondurable and negative for durable consumption. |
| Subjects: | | consumption growth consumption volatility within-group inequality GSOEP EVS |
| JEL: | | E21 D91 D31 D64 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SFB 649 Discussion Papers, HU Berlin
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