@techreport{e28e665bf74e4c2781afddc48143413e,
title = "Dundee Discussion Papers in Economics 107: Does consumption deviate from the permanent income path? An empirical study of UK data ",
abstract = "It has become something of a stylised fact that the change in consumer spending exhibits persistence. This is often interpreted as indicating a violation of the rational expectations permanent income (RE-PI) hypothesis. This paper considers an alternative interpretation, namely that such persistence reflects portfolio disturbances from the financial sector which temporarily push consumption away from its RE-PI path. Empirical support for this interpretation is provided using a UK data set.",
keywords = "Permanent income, Wealth allocation, Portfolio adjustment, Cointegration, Error correction",
author = "R. MacDonald and H. Molana",
year = "2000",
language = "English",
series = "Dundee Discussion Papers in Economics",
publisher = "University of Dundee",
number = "107",
type = "WorkingPaper",
institution = "University of Dundee",
}