Chapter

Macroeconomics and Microeconomics

Angus Deaton

in Understanding Consumption

Published in print October 1992 | ISBN: 9780198288244
Published online November 2003 | e-ISBN: 9780191596131 | DOI: http://dx.doi.org/10.1093/0198288247.003.0005

Series: Clarendon Lectures in Economics

 Macroeconomics and Microeconomics

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Reviews the large econometric literature that uses micro data to test the theory of intertemporal allocations and finds it inconclusive. The empirical work that is reviewed focuses on the permanent income hypothesis, excess sensitivity, and measurement error. It argues that short panels are not well suited to testing the key theoretical predictions. The chapter concludes by reviewing evidence that looks for the presence of altruism and risk sharing between households and evaluates the extent to which consumption patterns move together.

Keywords: altruism; econometrics; excess sensitivity; households; intertemporal choice; measurement error; permanent income; risk‐sharing

Chapter.  17528 words. 

Subjects: Macroeconomics and Monetary Economics

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