More on Windfall Income and Consumption

@article{Lee1975MoreOW,
  title={More on Windfall Income and Consumption},
  author={Tong Hun Lee},
  journal={Journal of Political Economy},
  year={1975},
  volume={83},
  pages={407 - 417}
}
  • Tong Hun Lee
  • Published 1975
  • Economics
  • Journal of Political Economy
The permanent-income hypothesis (PIH) of consumption postulates that the marginal propensity to consume (MPC) of transitory income is zero. It maintains that, since windfall receipts are largely transitory income, they tend to increase consumption only insofar as they increase the permanent or long-run expected income. This feature of the PIH has important implications. According to Friedman's original exposition, the zero MPC of transitory income "introduces important substantive content into… Expand
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T~'~HE permanent-income hypothesis (PIH) regards both measured income and measured consumption as the sum of permanent and transitory components. In Milton Friedman's original exposition [9], theExpand
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Abstract Two exact tests are presented for testing the hypothesis that the residuals from a least squares regression are homoscedastic. The results can be used to test the hypothesis that a linearExpand
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" Consumption , Savings , and Windfall Gains . "
  • A . E . R .
  • 1962
WINDFALL INCOME AND CONSUMPTION
Consumption , Savings and Windfall Gains : Reply . " A
  • . E . R .
Consumption, Savings and Windfall Gains: Reply
  • A.E.R