consumption-saving behavior. We construct a novel consumption-saving model where the household must infer the persistent component … marginal propensity to consume because the short run covariance between income growth and consumption growth increases when … can be identified from panel data on income and consumption. Finally, we estimate a high degree of knowledge in the Panel …

We show that the optimal consumption of an individual over the life cycle can have the hump shape (inverted U …, an impatient individual would prefer a decreasing consumption path over life. However, because of habit formation, a high … initial consumption would lead to high required consumption in the future. To cover the future required consumption, wealth is …

We model consumption and labor supply behavior of a couple in a non-cooperative setting. Using minimal assumptions, we …

able to take into account consumption dynamics. In the model, households derive utility from consumption, and they relate … their purchase behavior to consumption planning. We illustrate our model for yogurt purchases, and show that our model …

We propose a representation of individual preferences with a subsistence requirement in consumption, and examine its … environmental services. We find that the Hicksian elasticity of substitution strictly monotonically increases with the consumption … of environmental services above the subsistence requirement, and approaches the standard CES value as consumption becomes …

We study the cyclical dynamics of consumption in the euro area (EA) and the large EA countries by distinguishing … cross-country heterogeneity in how different factors (including durable-specific ones) explain consumption; (iii) the … strength of spillovers from durable to nondurable consumption, as predicted by theory, is empirically correlated with how much …

households are tempted to consume their liquid wealth but can use illiquid housing as a savings commitment device. The importance … of temptation and commitment is identified using data on consumption, liquid assets, and housing wealth over the life … need for commitment. Preference for illiquidity has important implications for the consumption response to unexpected …

This paper presents a laboratory experiment that directly tests the theoretical predictions of consumption choices … under rational inattention. Subjects are asked to select consumption when income is random. They can optimally decide to … of the theory: 1) Subjects optimally make stochastic consumption choices; 2) They respond to incentives and changes in …