Please use this identifier to cite or link to this item: https://repositorio.insper.edu.br/handle/11224/5792
Type: Working Paper
Title: The Stationarity of Consumption–Income Ratios: Evidence from South American Countries
Author: Gomes, Fábio Augusto Reis
Franchini, Douglas de Souza
Publication Date: 2008
Abstract: The aim of this paper is to analyze the order of integration of the consumption– income ratio in 10 South American countries. To fulfill this purpose, the individual ADF test, its panel versions [Maddala and Wu (1999) and Choi (2001)] and the Minimum LM unit root test with structural break(s) [Lee and Strazicich (1999, 2003)] were employed. While the former tests found more favorable evidence to an integrated process, after controlling for structural breaks only Uruguay seems to be integrated. Thus, in general, the consumption-income ratio was diagnosed as a stationary process, as suggested by the relative income hypothesis, the habit persistence model, the permanent income hypothesis and the life cycle hypothesis.
Keywords (english terms): Consumption–income ratio
unit root tests
structural break
South America
Language: Inglês
CNPq Area: Ciências Sociais Aplicadas
Copyright: O INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DO USUÁRIO VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR
Appears in Collections:Coleção Insper Working Papers

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