Evidence on excess sensitivity of consumption to predictable income growth

2011 ◽  
Vol 65 (2) ◽  
pp. 71-77 ◽  
Author(s):  
Michele Limosani ◽  
Emanuele Millemaci
Keyword(s):  
Income Growth ◽  
Excess Sensitivity

scholarly journals Household Production and the Excess Sensitivity of Consumption to Current Income

1999 ◽  
Vol 89 (4) ◽  
pp. 902-920 ◽  
Author(s):  
Marianne Baxter ◽  
Urban J Jermann
Keyword(s):  
Empirical Research ◽  
Strong Evidence ◽  
Equilibrium Model ◽  
Household Production ◽  
Permanent Income ◽  
Income Growth ◽  
Work Effort ◽  
Consumption Growth ◽  
Current Income ◽  
Excess Sensitivity

Empirical research on the permanent-income hypothesis (PIH) has found that consumption growth is excessively sensitive to predictable changes in income. This finding is interpreted as strong evidence against the PIH. We propose an explanation for apparent excess sensitivity that is based on a quantitative equilibrium model of household production in which permanent-income consumers respond to shifts in sectoral wages and prices by substituting work effort and consumption across home and market sectors. Although the PIH is true, this mechanism generates apparent excess sensitivity because market consumption responds to predictable income growth. (JEL D13, E10, E21).

IRAs under Progressive Tax Regimes and Income Growth

CFA Digest ◽  
2010 ◽  
Vol 40 (2) ◽  
pp. 66-67
Author(s):  
Jonathan Wheeler Hubbard
Keyword(s):  
Income Growth ◽  
Progressive Tax ◽  
Tax Regimes

Framework

2018 ◽  
Author(s):  
Alan Roe ◽  
Jeffery Round
Keyword(s):  
Supply Chains ◽  
Social Impacts ◽  
Income Growth ◽  
Direct Effects ◽  
Local Supply ◽  
Multiplier Effects ◽  
Economic And Social Impacts

This chapter discusses the channels of impact of an extractives activity on an economy by describing the different routes through which the direct economic and social impacts of these activities might be enhanced. These routes include those that often have the highest political profile, namely spending of government revenues. It also discusses other channels that arguably are far more important, such as the direct effects of corporate spend in local supply chains; the immediate ‘multiplier’ effects of this; the further multipliers that follow from significant income growth; the new downstream activities that may be built on the primary extractive activity; and the externalities that may accrue from the direct boost that a large extractive investment is likely to provide.

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