Some countries have the resources and capacity to save more than the other countries. This paper analyses the determinants of annual saving. The analysis uses the optimal saving function which is derived from the household inter-temporal utility maximisation. The predictions from the comparative...

The following question is analyzed: under what circumstances can one a stable (i.e., time invariant) functional relationship which links aggregate consumption in period t with aggregate income in period t and another "determinants" of consumtion that refer to periods prior to period t and can be...

The paper is about the economic modelling of aggregate consumption expenditure with particular emphasis on the distribution effects of income. Under certain assumptions on the evolution over time of the population of households ("structural stability") we shall derive a first order approximation...

It is shown how one can effectively use microdata in modelling the change over time in an aggregate (e.g. mean consumption expenditure) of a large and heterogeneous population. The starting point of our aggregation analysis is a specification of explanatory variables on the micro-level....

This paper empirically tests the validity of using only mean income as a representative variable for the whole population in the aggregate consumption relation and of assuming time-invariance of the coefficients in this relation, as done in macromodels. We use a statistical distributional...

Keynesian theory suggests that a reduction in government expenditure has a negative effect on private demand and therefore on output. Contrary, neoclassical theory argues that reduced public expenditure makes room for an expansion of the private sector and thus has a stimulating effect on the...

Modern consumer theories are built upon the premise of the forward looking behavior of households. While most of the empirical studies at micro level are based on Euler equation, there have been few to estimate the household consumption function and test the implication of forward looking...

In transitional stage saving rate play an important role in output growth rate as proposed by Krugman. Accumulationists are also right as claiming that learning-by-doing play an important role in TFP growth in NIEs. However, using a CES production technology we can show that the growth model...

Previous tests for liquidity constraints using consumption Euler equations have frequently used asset-based sample separation rules, arguing that low wealth consumers are more likely to be constrained. We propose an alternative sample separation rule using direct information on borrowing...

The paper surveys and extends recent results on the effect of changes in government fiscal and financial policy, and in private savings behaviour, on economic growth. Private saving behaviour is represented by an overlapping generations (OLG) model. The supply side of the model permits...