Understanding Consumption / Edition 1

Understanding Consumption / Edition 1

by Angus Deaton
     
 

This book provides an overview of recent research on saving and consumption, a field in which substantial progress has been made over the last decade. Economists attempting to understand saving and consumption patterns have generated some of the best science in economics. For more than fifty years, there has been serious empirical and theoretical

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Overview

This book provides an overview of recent research on saving and consumption, a field in which substantial progress has been made over the last decade. Economists attempting to understand saving and consumption patterns have generated some of the best science in economics. For more than fifty years, there has been serious empirical and theoretical activity—never separating data, theory, and policy as has happened in many branches of economics. Research has drawn microeconomists interested in household behavior, as well as macroeconomists, for whom the behavior of aggregate consumption has always occupied a central role in explaining aggregate fluctuations. Econometricians have also made distinguished contributions, and there has been a steady flow of new methodologies by those working on saving and consumption, in time-series econometrics, as well as in the study of micro and panel data. A coherent account of these developments is presented here, emphasizing the interplay between micro and the macro, between studies of cross-section and panels, and those using aggregate time series data.

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Product Details

ISBN-13:
9780198288244
Publisher:
Oxford University Press
Publication date:
10/28/1992
Series:
Clarendon Lectures in Economics Series
Edition description:
New Edition
Pages:
256
Product dimensions:
9.13(w) x 6.13(h) x 0.58(d)
Lexile:
1570L (what's this?)

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Table of Contents

1Theoretical Foundations1
1.1A simple model of intertemporal choice and the life cycle2
1.2On intertemporal preferences6
1.3Intertemporal choice21
1.4On the aggregation of individual behavior37
2Consumption, Growth, and Interest44
2.1Saving and growth45
2.2Saving and interest rates59
3Consumption and Permanent Income76
3.1A formal version of the permanent income hypothesis80
3.2The excess sensitivity of consumption87
3.3Consumption and permanent income: a first summary101
4The Volatility of Consumption104
4.1Measured income and permanent income105
4.2Is consumption too smooth?112
4.3Superior information, smoothness, and sensitivity122
4.4The volatility of consumption: a summary133
5Macroeconomics and Microeconomics136
5.1The permanent income hypothesis and the micro data137
5.2More microeconomic studies of intertemporal choice148
5.3Consumption interactions between households163
5.4The reconciliation of micro and macro evidence167
5.5Macroeconomics and microeconomics: a summary175
6New Directions: Beyond Permanent Income177
6.1Precautionary saving177
6.2Liquidity constraints194
6.3Precautionary saving versus liquidity constraints212
7Understanding Consumption214
Bibliography222
Index of Names235
Index of Subjects237

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