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dc.contributor.authorAttanasio, Orazio
dc.contributor.authorKovacs, Agnes
dc.contributor.authorMolnar, Krisztina
dc.date.accessioned2018-11-07T14:28:52Z
dc.date.available2018-11-07T14:28:52Z
dc.date.issued2018
dc.identifier.issn0804-6824
dc.identifier.urihttp://hdl.handle.net/11250/2571473
dc.description.abstractIn this paper, we make three substantive contributions: first, we use elicited subjective income expectations to identify the levels of permanent and transitory income shocks in a life-cycle framework; second, we use these shocks to assess whether households' consumption is insulated from them; third, we use the shock data to estimate an Euler equation for consumption. We find that households are able to smooth transitory shocks, but adjust their consumption in response to permanent shocks, albeit not fully. The estimates of the Euler equation parameters with and without expectational errors are similar, which is consistent with rational expectations. We break new ground by combining data on subjective expectations about future income from the Michigan Survey with micro data on actual income from the Consumer Expenditure Survey.nb_NO
dc.language.isoengnb_NO
dc.publisherInstitutt for samfunnsøkonomi, NHHnb_NO
dc.relation.ispartofseriesDP SAM;21/2018
dc.subjectLife cycle models; estimating Euler Equations; survey expectationsnb_NO
dc.titleEuler Equations, Subjective Expectations and Income Shocksnb_NO
dc.typeWorking papernb_NO
dc.subject.nsiVDP::Samfunnsvitenskap: 200nb_NO
dc.source.pagenumber48nb_NO


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