Demographic Effects and the Multiperiod Consumption Function.

Past empirical studies of the aggregate-consumption function have often assumed constancy of the age distribution of the population. This paper relaxes that assumption by specifying a multiperiod-consumption function which introduces age-distribution parameters explicitly into the model. This is acc...

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Publicado en:Journal of Political Economy Vol. 80; no. 1; pp. 125 - 139
Autor principal: Heien, Dale M.
Formato: Artículo
Publicado: University of Chicago Press Jan/Feb72
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: Jan/Feb72
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        atl: Demographic Effects and the Multiperiod Consumption Function.
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        au: Heien, Dale M.
        affil: Bureau of Labor Statistics.
      su:
        Consumption (Economics)
        Mathematical models of consumption
        Demand function
        Interest rates
        Age distribution
        Elasticity (Economics)
        Data analysis
      sug:
        subj:
          Consumption (Economics)
          Mathematical models of consumption
          Demand function
          Interest rates
          Age distribution
          Elasticity (Economics)
          Data analysis
      ab: Past empirical studies of the aggregate-consumption function have often assumed constancy of the age distribution of the population. This paper relaxes that assumption by specifying a multiperiod-consumption function which introduces age-distribution parameters explicitly into the model. This is accomplished by specifying a multiperiod constant-elasticity-of-substitution (CES) type utility function where the consumer's time horizon is determined by various age-distribution parameters such as median age, retirement age, etc. The proportion of lifetime income spent on current consumption is shown to depend on the rate of interest, the age-distribution parameters, and the parameters of the utility function. Lifetime income, in turn, depends on the interest rates and age parameters. The model, which is nonlinear, is estimated using annual data from 1948 to 1965. The effects of changes in interest rates and age parameters are assessed, and a prediction-interval test is applied to the model.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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          year: 1972
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