Pischke (1995) has argued that imperfect information may account for the failure of Hall's permanent income hypothesis to explain the behaviour of aggregate consumption. We identify the restrictions that Pischke's theory places on the dynamics of aggregate consumption and test them using...

This paper develops a two-equation model of money, interest rates, and inflation based on the simple quantity theory an d Fisher's hypothesis about nominal interest rates. The model has both within-equation and cross-equation restrictions that are tested on long-run average cross-country data...

Friedman (1992) argues that regressing cross-country income changes on their final levels can be informative about sigma-convergence (the tendency for the dispersion of income levels to narrow) whereas a similar regression on initial levels of income cannot be. In this note we show that Bliss's...