| Abstract: | Conclusion Nominal interest payments that come as a compensation for a fall in the real value of monetary assets can hardly be counted
as income, if that variable is to have economic content. In spite of this obvious fact, and in a time when consumers are quite
often modeled as being extremely rational, most econometric studies still use the disposable income data as if they were a
good approximation of an economically meaningful variable even in times of inflation. Both theoretical and empirical work
indicate that this is not the case. Perhaps the fact that the empirical work performed also has remarkably good prediction
properties will help make econometricians think more carefully about the economic content of the data series they use. |
