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

Michael Mcaleer, J.B. Madsen

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Recent empirical research suggests that the rational expectations life-cycle permanent income hypothesis (LC-PIH) breaks down because consumers are liquidity constrained. This paper re-examines the liquidity constraint hypothesis against the uncertainty and the behavioural life-cycle (SLC) hypotheses using macropanel data for 22 OECD countries, The empirical results provide very strong support for the uncertainty and the BLC hypotheses and no support for the liquidity constraint hypothesis. (C) 2001 Elsevier Science B.V. All rights reserved.
Original languageEnglish
Pages (from-to)61-89
JournalJournal of Economic Psychology
Volume22
DOIs
Publication statusPublished - 2001

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