A Direct Test of the Permanent Income Hypothesis with an Application to the US 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 US states to perform the test. The empirical results provide some support for the PIH across states.

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Year of publication:	2003-01
Authors:	DeJuan, Joseph ; Seater, John ; Wirjanto, Tony
Institutions:	Department of Economics, University of Waterloo

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 03001
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005818068