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Intertemporal Substitution in Consumption: An American Investigation for Brazil
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Intertemporal Substitution in Consumption: An American Investigation for Brazil

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  • Cavalcanti, Carlos B.

Abstract

This paper examines different formulations of the Euler equation in order to assess their magnitude of the intertemporal substitution effect in Brazil during the 1980. Estimates of the intertemporal elasticity of substitution for those consumers that are not liquidity constrained are statistically significant, but less than one. The result suggest that an increase in interest rates in Brazil during this period had both income and substitution effects.

Suggested Citation

  • Cavalcanti, Carlos B., 1993. "Intertemporal Substitution in Consumption: An American Investigation for Brazil," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 13(2), November.
    • Handle: RePEc:sbe:breart:v:13:y:1993:i:2:a:2982
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    Cited by:

    1. Tomas Havranek & Anna Sokolova, 2016. "Do Consumers Really Follow a Rule of Thumb? Three Thousand Estimates from 130 Studies Say "Probably Not"," Working Papers 2016/08, Czech National Bank.
    2. Julian Thimme, 2017. "Intertemporal Substitution In Consumption: A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 226-257, February.
    3. Monteiro, Marcel Stanlei & Gutierrez, Carlos Enrique Carrasco, 2022. "Testing Consumption-Based CAPM Using the Stochastic Discount Factor," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 76(1), June.
    4. Barros Júnior, Fernando Antônio de & Delalibera, Bruno Ricardo & Pinho Neto, Valdemar Rodrigues de, 2018. "Predictability of Aggregate Consumption in Brazil: habits, Non-Separability between Consumption and Leisure, or Credit Constraint?," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 38(1), May.

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