Dejuan, Joseph P; Seater, John J; Wirjanto, Tony S - In: Journal of Money, Credit and Banking 36 (2004) 6, pp. 1091-1103
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...