individual income data and assume that agents have to consume their endowment. I find that the model does not pass the Hansen and … Jagannathan test even for very volatile idiosyncratic income data. …

investigate the empirical relation between three cointegrated variables: aggregate consumption, asset wealth, and labor income … the following structural question about the short-run dynamics: "How quickly does consumption adjust to changes in income … in income or wealth have been realized. We argue here, however, that a statistical methodology different from that used …