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    Time variation in lifecycle consumption and income

    Aksoy, Yunus and Basso, Henrique S. and St Aubyn, Carolyn (2021) Time variation in lifecycle consumption and income. Working Paper. Banco de Espana.

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    Abstract

    We document systematic and significant time variation in US lifecycle non-durable consumption profiles. Consumption profiles have consistently become flatter: differences in consumption across generations have decreased. Pooling data across different periods to identify lifecycle profiles masks relevant time variations and may artificially generate hump-shaped consumption age profiles. The main driver behind lifecycle consumption variations are lifecycle income changes, which display similar flattening. Employing a lifecycle model we show changes in income are sufficient to match the movements in consumption. The contributions of credit, housing and interest rates changes are quantitatively small.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: Banco de Espana Documentos de Trabajo no.2111, ISSN: 1579-8666
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Research Centres and Institutes: Applied Macroeconomics, Birkbeck Centre for
    Depositing User: Yunus Aksoy
    Date Deposited: 29 Mar 2021 12:48
    Last Modified: 11 Jun 2021 09:22
    URI: https://eprints.bbk.ac.uk/id/eprint/43665

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