According to conventional macroeconomics, public debt has a significant effect on the economy since consumers see public debt as net wealth, however, according to the Ricardian Equivalence hypothesis, that effect would be absent. This paper's results, obtained from Euler equation estimations,...

This paper estimates an Euler equation for per capita consumption to investigate whether social security increases consumption ceteris paribus in seventeen countries. Following the seminal work of Martin Feldstein, the literature has estimated consumption functions to address this question....

In this paper we exploit the specific structure of the Euler equation and develop two alternative GMM estimators that deal explicitly with measurement error. The first estimator assumes that the measurement error is lognormally distributed. The second estimator drops the distributional...

In this paper we exploit the specific structure of the Euler equation and develop two alternative GMM estimators that deal explicitly with measurement error. The first estimator assumes that the measurement error is lognormally distributed. The second estimator drops the distributional...

This paper presents estimates for the consumption Euler equation for Russia. The estimation is based on micro-level panel data and accounts for the preference heterogeneity, measurement errors, and the impact of macroeconomic shocks. The presence of multiplicative habits is checked with the...

We estimate the long-run discount factor for a group of developed and developing countries through standard methodology incorporating adaptive expectations of inflation. We find that the discount factor of developing countries is relatively nearer to unity as compared to that of the developed...

The consumption Euler equation is a building block of modern macro theory. Yet, the existing evidence on aggregate data offers very conflicting results for the estimates of the degree of forward-lookingness and interest rate semi-elasticity. The disappointing performance can be rationalized by...

The paper investigates household consumption behavior in Russia. The model assumes that household consumption can be determined both by Euler equation and the rule of thumb. Using panel data on households (RLMS–HSE) from 2000 to 2011, we present estimates of elasticity of intertemporal...

This paper shows that the consumption-based asset pricing model (C-CAPM) with low-probability disaster risk rationalizes large pricing errors, i.e., Euler equation errors. This result is remarkable, since Lettau and Ludvigson (2009) show that leading asset pricing models cannot explain sizeable...

In this paper, we analyze the determinants of corporate saving in the form of changes in the stock of cash for 11 Asian economies using firm-level data from the Oriana Database for the 2002–2011 period. We find some evidence that cash flow has a positive impact on the change in the stock of...