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Certainty Equivalence and the Excess Sensitivity of Private Consumption

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  • LORENZO POZZI
  • GRIET MALENGIER

Abstract

For a panel of OECD countries, we show that the magnitude of the estimate for the excess sensitivity of private consumption to current income cannot be explained by a model based on certainty equivalence.

Suggested Citation

  • Lorenzo Pozzi & Griet Malengier, 2007. "Certainty Equivalence and the Excess Sensitivity of Private Consumption," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(7), pages 1839-1848, October.
    • Handle: RePEc:wly:jmoncb:v:39:y:2007:i:7:p:1839-1848
    DOI: 10.1111/j.1538-4616.2007.00089.x
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    References listed on IDEAS

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