Working Paper

Stochastic interest rates in the aggregate life cycle/permanent income cum rational expectations model


Abstract: An estimation of the life cycle/permanent income model with rational expectations that allows for uncertain future interest rates. Results provide ample evidence to reject this form of model during the postwar period.

Keywords: Rational expectations (Economic theory); Consumption (Economics); Income;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 1985

Number: 8506