On Testing the Permanent Income Hypothesis and Rational Expectations

Dor, Eric;Thurston, Thom;Weiserbs, Daniel
(1984) , 25 pages

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Authors
  • Dor, EricUCLouvain
    Author
  • Thurston, ThomQueens College, City University of New York
    Author
  • Weiserbs, DanielUCLouvain
    Author
Abstract
Following the insight of Hall (1978) and Sargent (1978), several studies have been devoted to the topic of rational expectations as applied to the permanent income and life-cycle theories of consumption (e.g. Bilson (1980), Flavin (1981), Hayashi (1983), Meullbauer (1983), Wickens and Molana (1984)). The empirical evidence has appeared to reject the implication that, under a special set of assumptions, real per capita consumption follows a martingale.
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Dor, E., Thurston, T., & Weiserbs, D. (1984). On Testing the Permanent Income Hypothesis and Rational Expectations (Working Papers Institut des sciences économiques 8410). https://hdl.handle.net/2078.5/280794