Gardberg, Malin; Pozzi, Lorenzo - 2018 - Revision: September 2018
The ratio of consumption to total household wealth (i.e., tangible assets plus unobserved human wealth) is commonly … calculated from the estimation of a log-linear version of the household intertemporal budget constraint as a cointegrating … component in the consumption equation. The consumption-to-wealth ratio calculated from this model is much less persistent than …