A Primer on the Economics and Time Series Econometrics of Wealth Effects

@inproceedings{Davis2001APO,
  title={A Primer on the Economics and Time Series Econometrics of Wealth Effects},
  author={Morris a. Davis and Michael G. Palumbo},
  year={2001}
}
This paper reviews the statistical approach typically applied by macroeconomists to investigate the empirical link between aggregate data on household consumption, income, and wealth. In particular, we focus on studies determining whether and how much changes in net worth, such as those generated by the stock-market boom in the U.S. over the latter 1990s, are responsible for subsequent swings in the growth rate of consumer spending. We show how simple economic theory is used to motivate an… CONTINUE READING

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