We argue that the equation commonly used in the estimation of the wealth effect on consumption might be unsuitable for … volatility increases. Estimation of a Markov-switching model of the usual long-run aggregate consumption equation provides …

Correction Models. The algorithm automates testing the cointegration rank of the system and performs simplifications based on …

This paper shows that the recent literature that tests for a long-run Fisher relationship using cointegration analysis … is seriously flawed. Cointegration analysis assumes that the variables in question are I(1) or I(d) with the same d …

starting point. We use perturbation methods around this analytical solution to derive decision rules for consumption and …

We examine the effects of decreasing down payment requirements on consumption volatility within a model which … consumption becomes more volatile as down payment requirements decrease. This finding is true for both individual and aggregate … consumption, and it is robust to the inclusion of adjustment costs. Transitional dynamics imply that a financial liberalization …

among consumption, financial wealth, housing wealth and labor income (summarized by the variable cday) should help to …