This paper examines a key stochastic implication of the canonical version of the permanent income model that new information about future income should give rise to an adjustment in consumption equal in magnitude to the adjustment in permanent income. Using data from 29 Chinese provinces, the empirical results are consistent with the model.
|Number of pages||19|
|Journal||Annals of Economics and Finance|
|Publication status||Published - 1 Nov 2016|
- Chinese provinces
- Permanent income. JEL Classification Number: E21
ASJC Scopus subject areas
- Economics and Econometrics