Intertemporal Substitution in Consumption Revisited:

Some of the highly controversial questions in macroeconomics critically hinge on the value of a single parameter of consumer preference--the elasticity of intertemporal substitution. This paper provides new estimates of this parameter for individual G-7 and a panel of twenty OECD countries. We find...

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Bibliographic Details
Main Author: Hu, Zuliu (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C International Monetary Fund 1993
Series:IMF Working Papers Working Paper No. 93/26
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Summary:Some of the highly controversial questions in macroeconomics critically hinge on the value of a single parameter of consumer preference--the elasticity of intertemporal substitution. This paper provides new estimates of this parameter for individual G-7 and a panel of twenty OECD countries. We find that single equation GMM estimates are typically small and imprecise, consistent with Hall's (1988) finding from the U.S. data. Estimation of a system of equations that takes into account the cross-equation restrictions implied by theory, however, generally gives larger and better determined values for the parameter. The panel procedure also yields relatively large estimates. Overall our multi-country results contradict the hypothesis of zero intertemporal substitution
Physical Description:1 Online-Ressource (26 p)
ISBN:1451844301
9781451844306

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