Template-Type: ReDIF-Paper 1.0
Author-Name:  Lourenço Senne Paz
Author-Name-First: Lourenço Senne
Author-Name-Last: Paz
Author-Name:  Fábio Augusto Reis Gomes
Author-Name-First: Fábio Augusto Reis
Author-Name-Last: Gomes
Title: Consumption in South America: myopia or liquidity constraints
Abstract:  In this paper, we consider Brazil, Colombia, Peru and Venezuela for a study on aggregate consumption behavior, in which we test the life cycle-permanent income hypothesis prediction that consumption growth depends only on interest. Our results suggest that only Venezuelan data supported this prediction. To identify possible reasons for rejection in the other cases, we checked for liquidity constraints, myopia and perverse asymmetry. We found that for Brazil the perverse asymmetry was rejected, whereas for Colombia the liquidity constraint hypothesis was rejected. The results were uninformative about Peruvian consumption.
Length:  17 pages
Creation-Date:  2008
Order-URL: https://repositorio.insper.edu.br/handle/11224/5850
File-URL: https://repositorio.insper.edu.br/handle/11224/5850
File-Format: text/html
File-Function: Full text
Number: 016
Handle: RePEc:aap:wpaper:016