This paper documents that region-level consumption exhibits excess sensitivity to lagged income in Italy, Japan, Spain …, the United Kingdom and West Germany. However, region-specific idiosyncratic) consumption exhibits substantially less …

1982-2003. To this end, standard consumption equations are estimated and then compared, in terms of in-sample and out … about the i) current, ii) future, iii) general, and iv) personal situation. In turn, the total private consumption is … household surveys improves both the goodness- of-fit of consumption equations and their forecasting performances. It is …

analytical solution to the model, we solve it numerically. We find that nondurable consumption becomes more volatile as down … adjustment of consumption to permanent income shocks in an attempt by agents to spread out the burden of down payments over time. …