A Direct Test of the Permanent Income Hypothesis with an Application to the U.S. States.

This paper tests the prediction of the permanent income hypothesis (PIH) that news about future income induce a revision in consumption equal to the revision in permanent income. We use time-series data from 48 contiguous U.S. states to perform the test. The empirical results provide some support for the PIH across states.

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Year of publication:	2004
Authors:	Dejuan, Joseph P ; Seater, John J ; Wirjanto, Tony S
Published in:	Journal of Money, Credit and Banking. - Blackwell Publishing. - Vol. 36.2004, 6, p. 1091-1103
Publisher:	Blackwell Publishing

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005530358