Abstract This paper shows that standard methods for estimating log-linearized consumption Euler equations using micro … simulated consumers behaving exactly according to the standard model. Furthermore, consumption growth for the simulated …-order approximation to the Euler equation. The paper concludes that empirical estimation of consumption Euler equations should be …

This paper studies the consumption decisions of agents who face costs of acquiring, absorbing and processing … consumption plans. In between updating dates, they remain inattentive. This behaviour implies that news disperses slowly … throughout the population, so events have a gradual and delayed effect on aggregate consumption. The model predicts that …

This paper shows that standard methods for estimating log-linearized consumption Euler equations using micro data … consumers behaving exactly according to the standard model. Furthermore, consumption growth for the simulated consumers is very … the Euler equation. The paper concludes that empirical estimation of consumption Euler equations should be abandoned, and …

State-level consumption exhibits excess sensitivity to lagged income to the same extent as US aggregate data, but state …-specific (idiosyncratic) consumption exhibits substantially less sensitivity to lagged stste-specific income - a result that also holds for … reaction of consumption to idiosynctratic disposable income shocks even if it fails at the aggregate US level. Further analysis …