We follow Fuhrer (2000) in estimating via Maximum Likelihood a log-linear consumption function on UK data. In doing so we consider various habit formation assumptions. We show that a model of purely "external" habits as in Fuhrer (2000) fits the UK data remarkably well, and possibly in a...

We follow Fuhrer (2000) in estimating via Maximum Likelihood a log-linear consumption function on UK data. In doing so we consider various habit formation assumptions. We show that a model of purely “external” habits as in Fuhrer (2000) fits the UK data remarkably well, and possibly in a...

Abstract: The literature on the New Phillips Curve (NPC) started off with an analysis of pricing behaviour in economies that are closed and with price and wage contracts that are either of the Calvo or Taylor-style. In the spirit of the Batini, Jackson and Nickell (2000) here we focus on the...

We follow Fuhrer (2000) in estimating via Maximum Likelihood a log-linear consumption function on UK data. In doing so we consider various habit formation assumptions. We show that a model of purely external habits as in Fuhrer (2000) fits the UK data remarkably well, and possibly in a superior...

We follow Fuhrer (2000) in estimating via Maximum Likelihood a log-linear consumption function on UK data. In doing so we consider various habit formation assumptions. We show that a model of purely “external” habits as in Fuhrer (2000) fits the UK data remarkably well, and possibly in a...