Do liquidity constraints generate excess sensitivity in consumption? New evidence from a sample of post-bankruptcy households

Journal of Macroeconomics

Volumn 29, Issue 4, 2007, Pages 790-805

  Filer, Larry ^a   Fisher, Jonathan D ^b  

^a OLD DOMINION UNIVERSITY   (United States)

^b Litigation Analytics Inc   (United States)

Author keywords

Liquidity constraints; Permanent income hypothesis; Personal bankruptcy

Indexed keywords

EID: 35549003511     PISSN: 01640704     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jmacro.2005.11.005     Document Type: Article

References (26)

1. Altonji J.G., and Siow A. Testing the response of consumption to income changes with (noisy) panel data. Quarterly Journal of Economics 102 (1987) 293-328
2. Athreya K. Welfare implications of the Bankruptcy Reform Act of 1999. Journal of Monetary Economics 49 (2002) 1567-1595
3. Attanasio O., and Weber G. Is consumption growth consistent with intertemporal optimization? Evidence from the consumer expenditure survey. Journal of Political Economy 103 (1995) 1121-1157
4. Berkowitz J., and White M. Bankruptcy and small firms' access to credit. Rand Journal of Economics 35 (2004) 69-84
5. Bowman D., Minehart D., and Rabin M. Loss aversion in a consumption-savings model. Journal of Economic Behavior and Organization 38 (1999) 155-178
6. Browning M., and Lusardi A. Household saving: Micro theories and micro facts. Journal of Economic Literature 34 (1996) 1797-1855
7. Dynan K. How prudent are consumers?. Journal of Political Economy 101 (1993) 1104-1113
8. Fay S., Hurst E., and White M. The household bankruptcy decision. American Economic Review 92 (2002) 706-718
9. Filer L., and Fisher J. The consumption effects associated with filing for personal bankruptcy. Southern Economic Journal 71 (2005) 837-854
10. Gali, J., Lopez-Salido, D., Valles, J., 2004. Rule-of-thumb consumers and the design of interest rate rules. NBER working paper #10392.
11. Garcia R., Lusardi A., and Ng S. Excess sensitivity and asymmetries in consumption: An empirical investigation. Journal of Money, Credit, and Banking 29 (1997) 154-176
12. Hall R. Stochastic implications of the life cycle-permanent income hypothesis: Theory and evidence. Journal of Political Economy 86 (1978) 971-987
13. Hall R., and Mishkin F. The sensitivity of consumption to transitory income: Estimates from panel data on households. Econometrica 50 (1982) 461-482
14. Hayashi F. The effect of liquidity constraints on consumption: A cross-sectional analysis. Quarterly Journal of Economics 100 (1985) 183-206
15. Jappelli T. Who is credit-constrained in the US economy?. Quarterly Journal of Economics 1 (1990) 219-234
16. Jappelli T., and Pistaferri L. Using subjective income expectations to test for excess sensitivity of consumption to predicted income growth. European Economic Review 44 (2000) 337-358
17. Jappelli T., Pischke J., and Souleles N. Testing for liquidity constraints in Euler equations with complementary data sources. Review of Economics and Statistics 2 (1998) 251-262
18. Lusardi A. Permanent income, current income, and consumption: Evidence from two panel data sets. Journal of Business and Economic Statistics 14 (1996) 81-90
19. Mankiw G. The saves-spenders theory of fiscal policy. American Economic Review 90 (2000) 120-125
20. Musto D. The effect of personal bankruptcy on credit access: Evidence from a panel database of credit reports. Journal of Business 77 (2004) 725-748
21. Runkle D. Liquidity constraints and the permanent-income hypothesis. Journal of Monetary Economics 27 (1991) 73-98
22. Shea J. Myopia, liquidity constraints, and aggregate consumption: A simple test. Journal of Money, Credit, and Banking 27 (1995) 798-805
23. Shea J. Union contracts and the life-cycle/permanent-income hypothesis. American Economic Review 85 (1995) 186-200
24. Souleles N. The response of household consumption to income tax refunds. American Economic Review 89 (1999) 947-958
25. Tversky A., and Kahnemann D. Loss aversion in riskless choice: A reference-dependent model. Quarterly Journal of Economics 106 (1991) 1039-1061
26. Zeldes S. Consumption and liquidity constraints: An empirical investigation. Journal of Political Economy 97 (1989) 305-346