The contents of this note are based on three estimates of the Marginal Propensity to Consume (MPC): a high measure derived from the long run relationship between consumption and income, a low measure derived from the MPC relation’s intermediate run, and an actual measure derived from current consumption and income values. The goals are to determine the actual regularities in the statistical distribution and behaviour of steady state consumption, as a function of the MPC estimation method. The note calculates the implied steady state variables, and then recovers high, low, and actual measurements of consumption growth rates. A close examination of the results shows 12 stylised realities that are implied by the steady state’s basic progress. These details include the consumption series’ level connections, variances, and growth rates, as well as their statistical distributions. As a result, the note goes into great detail about the stylized facts that any model of the perpetual income hypothesis must explain and support.
Author (S) Details
Samih Antoine Azar
Faculty of Business Administration and Economics Haigazian University Beirut, Lebanon.
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