Koop, Gary; Strachan, Rodney; Potter, Simon M. - Department of Economics, Leicester University - 2005
This paper discusses the consumption-wealth relationship. Following the recent influential work of Lettau and Ludvigson [e.g. Lettau and Ludvigson (2001), (2004)], we use data on consumption, assets and labor income and a vector error correction framework. Key findings of their work are that...