Rational International: A Cross-Country Study of the Permanent Income Hypothesis
(2023) NEKN01 20231Department of Economics
- Abstract (Swedish)
- This study investigates the validity of the Permanent Income Hypothesis (PIH) across seven
countries from 1970 to 2021. Using Hall's random-walk model and Campbell and Mankiw’s
IV model, I investigate if the consumption patterns align with the implications of the PIH and
if there are differences between the countries studied. The analysis suggests evidence against
the PIH, revealing deviations from the expectations in many cases. At the same time, some
countries’ populations show consumption patterns that align with the PIH, providing some
evidence in favour of the theory. The differences between countries also suggest that there
are other variables, such as culture, that might influence consumption patterns as well.
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9135986
- author
- Linde, Viktor LU
- supervisor
- organization
- course
- NEKN01 20231
- year
- 2023
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Permanent Income Hypothesis, Consumption Theory
- language
- English
- id
- 9135986
- date added to LUP
- 2023-09-12 15:37:14
- date last changed
- 2023-09-12 15:37:14
@misc{9135986, abstract = {{This study investigates the validity of the Permanent Income Hypothesis (PIH) across seven countries from 1970 to 2021. Using Hall's random-walk model and Campbell and Mankiw’s IV model, I investigate if the consumption patterns align with the implications of the PIH and if there are differences between the countries studied. The analysis suggests evidence against the PIH, revealing deviations from the expectations in many cases. At the same time, some countries’ populations show consumption patterns that align with the PIH, providing some evidence in favour of the theory. The differences between countries also suggest that there are other variables, such as culture, that might influence consumption patterns as well.}}, author = {{Linde, Viktor}}, language = {{eng}}, note = {{Student Paper}}, title = {{Rational International: A Cross-Country Study of the Permanent Income Hypothesis}}, year = {{2023}}, }