This paper proposes that the time-series data on consumption, income, and interest rates are best viewed as generated not by a single representative consumer but by two groups of consumers. Half the consumers are forward-looking and consume their permanent income, but are extremely reluctant to...

This paper evaluates an approach popularized by McCloskey and Nash (1984) that exploits the fact that grain prices provide information on interest rates. While the grain price approach enables a comparative analysis of capital market development across pre-modern economies and has been applied...