Certainty Equivalence and the Excess Sensitivity of Private Consumption |
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| Authors: | LORENZO POZZI GRIET MALENGIER† |
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| Institution: | Lorenzo Pozzi;is a Postdoctoral Fellow, Fund for Scientific Research (FWO, Flanders, Belgium) and Sherppa (Ghent University) (E-mail:). Griet Malengier;is a Research Assistant, Fund for Scientific Research (FWO, Flanders, Belgium) and Sherppa (Ghent University) (E-mail:). |
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| Abstract: | For a panel of OECD countries, we show that the magnitude of the estimate for the excess sensitivity of private consumption to current income cannot be explained by a model based on certainty equivalence. |
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| Keywords: | E21 |
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