Intertemporal Substitution and Durable Goods: An Empirical Analysis

Fauvel, Yvon; Samson, Lucie

doi:10.2307/135486

Cited by 24 publications

(11 citation statements)

References 11 publications

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“…Eichenbaum, Hansen and Singleton (1988) find higher estimates when they consider leisure-consumption interactions. In studies that include durable goods, Fauvel and Samson (1991) and Ogaki and Reinhart (1998) also tend to find higher intertemporal elasticities measures. Tesar (1993) uses an estimate of intratemporal substitution elasticity of 0.44 obtained from a sample of 30 developing and industrialized countries; Ostry and Reinhart (1991) find a larger estimate in a sample of 13 developing countries.…”

Section: Simulationsmentioning

confidence: 93%

On the Political Economy of Temporary Stabilization Programs

Alfaro¹

2002

Economics & Politics

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JEL classification code: E6, F31, F41.Key words: temporary policies, exchange-rate-based stabilization programs, real exchange-rate appreciation. AbstractThis paper provides a political economy explanation for temporary exchange-rate-based stabilization programs by focusing on the distributional effects of real exchange-rate appreciation. Ipropose an economy in which agents are endowed with either tradable or nontradable goods. Under a cash-in-advance assumption, a temporary reduction in the devaluation rate induces a consumption boom accompanied by real appreciation, which hurts the owners of tradable goods. The owners of nontradables have to weigh two opposing effects: an increase in the present value of nontradable goods wealth and a negative intertemporal substitution effect. For reasonable parameter values, owners of nontradables are better off.

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Section: Simulationsmentioning

confidence: 93%

On the Political Economy of Temporary Stabilization Programs

Alfaro¹

2002

Economics & Politics

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“…Although this idea has attracted little attention in the literature, it is an important proposition since it alludes to a model where (i) utility is nonseparable, and (ii) nonseparabilities play a role in the withdrawal from addiction. 32 This may be particularly important in the light of time-series evidence rejecting the assumption of utility being additively separable in durables, services and non-durables (Startz 1989, Fauvel and Samson 1991and Patterson 1994.…”

Section: Directions For Future Researchmentioning

confidence: 99%

Habit Formation and the Theory of Addiction

Messinis

1999

Journal of Economic Surveys

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In the light of repeated rejections of the Hall (1978) version of the life cycle-permanent income hypothesis and other empirical puzzles, the habit formation hypothesis has increased in popularity since the 1980s. However, existing formulations of habit persistence do not always perform well empirically. This paper pursues two objectives: (i) to outline the habit persistence hypothesis, and (ii) to review the theory of addiction with a focus on issues of relevance to the theory of consumption. In the literature on addiction, two research traditions are discernible: rational addiction and myopic addiction. The former approach emphasises forward-looking behaviour and defines memory loss as a univariate process. The latter relies on multiple objectives and highlights the role of contractual behaviour. The paper argues that future research in consumption with habits ought to pay more attention to non-separabilities, allow for multivariate processes when modelling memory loss and consider rational habit modification.

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“…Further, Jappelli and Pagano (1989) demonstrated a major role for durable goods in the demand for credit. Consumption of durables can be substituted for consumption of other goods (Fauvel & Samson, 1991;Mankiw, 1985) but also, as durables yield utility in * Ph.D., Warsaw School of Economics, Institute of Statistics and Demography. many consecutive periods, so their purchase can be easily postponed.…”

Section: Introductionmentioning

confidence: 99%

A Composite Indicator of Household Demand for Debt (Konstrukcja Wskaźnika Złożonego Popytu Na Kredyt Gospodarstw Domowych)

Białowolski

2015

Folia Oeconomica

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In this paper we present a novel approach for construction of a leading indicator for household demand for debt, i.e. consumer credit demand index. In order to derive the proper set of indicators we first present a theoretical background for the dimensions of the index. With all dimensions of the index at hand we search for indicators in the State of the Households Survey and consumer finance survey. We later aggregate the dimensions into a single index with generalized mean which does not allow for full compensability between dimensions. Finally, we check the leading properties of the index.

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Intertemporal Substitution and Durable Goods: An Empirical Analysis

Cited by 24 publications

References 11 publications

On the Political Economy of Temporary Stabilization Programs

On the Political Economy of Temporary Stabilization Programs

Habit Formation and the Theory of Addiction

A Composite Indicator of Household Demand for Debt (Konstrukcja Wskaźnika Złożonego Popytu Na Kredyt Gospodarstw Domowych)

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