Consumption, liquidity constraints, uncertainty and temptation: An international comparison

Authors
Madsen, JB McAleer, M
Citation
Jb. Madsen et M. Mcaleer, Consumption, liquidity constraints, uncertainty and temptation: An international comparison, J ECON PSYC, 22(1), 2001, pp. 61-89
Citations number
32
Categorie Soggetti
Psycology
Journal title
JOURNAL OF ECONOMIC PSYCHOLOGY
ISSN journal
01674870 → ACNP
Volume
22
Issue
1
Year of publication
2001
Pages
61 - 89
Database
ISI
SICI code
0167-4870(200102)22:1<61:CLCUAT>2.0.ZU;2-M
Abstract
Recent empirical research suggests that the rational expectations life-cycl e permanent income hypothesis (LC-PIH) breaks down because consumers are li quidity constrained. This paper re-examines the liquidity constraint hypoth esis against the uncertainty and the behavioural life-cycle (SLC) hypothese s using macropanel data for 22 OECD countries, The empirical results provid e very strong support for the uncertainty and the BLC hypotheses and no sup port for the liquidity constraint hypothesis. (C) 2001 Elsevier Science B.V . All rights reserved.