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 …

This paper studies the consumption decisions of agents who face costs of acquiring, absorbing and processing … consumption plans. In between updating dates, they remain inattentive. This behavior implies that news disperses slowly throughout … the population, so events have a gradual and delayed effect on aggregate consumption. The model predicts thataggregate …