In this paper we argue that once one departs from the simple classroom example, or `stripped down life-cycle model,' the empirical model for consumption growth can be made flexible enough to fit the main features of the data. More specifically, we show that allowing demographics to affect...

In this paper we show that some of the predictions of models of consumer intertemporal optimization are not inconsistent with the patterns of non-durable expenditure observed in US household-level data. Our results and our approach are new in several respects. First, we use the only US micro...

This paper studies the effect of demographic transitions on the economy of Latin America and the Caribbean (LAC). The paper builds a model of multi-regions of the world and derives the path of macroeconomic variables including aggregate output, capital, labor and the saving rate as economies...

In this paper we present empirical evidence of the importance of aggregation bias in Euler equations for consumption. The main result is that estimates of the elasticity of intertemporal substitution for consumption are consistently lower for aggregate data than for average cohort data. In...

There is much debate over whether the life-cycle model of consumption can explain consumption growth patterns patterns observed in household level data sources. We argue that once one departs from simple classroom example, or 'stripped down life-cycle model', the empirical model for consumption...