Consumption is the largest component of GDP. Since the 1950s, the life cycle and the permanent income models have … constituted the main analytical tools to the study of consumption behaviour, both at the micro and at the aggregate level. Since … the literature to estimate preferences is the lack of a ‘consumption function’. A challenge for future research is to use …

standard permanent income model with intertemporally separable utility: the sensitivity of consumption to lagged consumer … sentiment and to predictable changes in current income I show that in a habit formation model the sensitivity of consumption … growth to predicted income can be to a large extent reinterpreted as a sluggish response of consumption to news Moreover the …

The standard approach to modelling consumption/saving problems is to assume that the decisionmaker is solving a dynamic … stochastic optimization problem However under realistic descriptions of utility and uncertainty the optimal consumption …