Journal of Political Economy Vol. 85 No. 4 1977
Consumer Horizon: Further Evidence
Abstract
This paper provides new evidence on consumer subjective discount rate and the consumer horizon. Deriving the subjective interest rate for the United States, directly from total private wealth, the findings support Friedman's contention of a 3-year average horizon. Using the varying parameter method of estimation, a time series of factor of proportionality has been constructed and its behavior analyzed over the sample period 1929-69. Finally, the correlation between the permanent elements, permanent and transitory elements, and the transitory elements is verified. The results overwhelmingly support Friedman.
- DOI
- 10.1086/260604
- Volume
- 85
- Issue
- 4
- Pages
- 851-858
- Language
- en
- Sources
- openalex crossref