Journal of Political Economy Vol. 106 No. 5 1998
Measuring Intertemporal Substitution: The Role of Durable Goods
open access
Abstract
As pointed out by Hall (1988), intertemporal substitution by consumers is a central element of many modern macroeconomic and international models. We argue that Hall's estimator or the IES is downward biased because the intra-temporal substitution between nondurable consumption goods and durable consumption goods is ignored and because the changes in real interest rates affect user costs of durable goods.
- DOI
- 10.1086/250040
- Volume
- 106
- Issue
- 5
- Pages
- 1078-1098
- Language
- en
- Sources
- crossref openalex bibtex:phds-export.bib