The Stickiness of Aggregate Consumption Growth in OECD Countries: A Panel Data Analysis

This paper examines the sources of stickiness in aggregate consumption growth. We first derive a dynamic consumption equation which nests recent developments in consumption theory: rule-of-thumb consumption, habit formation, non-separabilities between both private consumption and hours worked and private consumption and government consumption, intertemporal substitution effects and precautionary savings. Next, we estimate this dynamic consumption equation for a panel of 15 OECD countries over the period 1972-2007 taking into account endogeneity issues and error cross-sectional dependence. To this end, we develop a generalised method of moments version of the common correlated effects pooled estimator and demonstrate its small sample behaviour using Monte Carlo simulations. The estimation results support the labour-consumption complementarity hypothesis, the rule-of-thumb consumption model and the notion that precautionary savings matter for the aggregate economy

The motivations for the adoption of management innovation by local governments and its performance effects

This article analyses the economic, political and institutional antecedents and performance effects of the adoption of shared Senior Management Teams (SMTs) – a management innovation (MI) that occurs when a team of senior managers oversees two or more public organizations. Findings from statistical analysis of 201 English local governments and interviews with organizational leaders reveal that shared SMTs are adopted to develop organisational capacity in resource‐challenged, politically risk‐averse governments, and in response to coercive and mimetic institutional pressures. Importantly, sharing SMTs may reduce rather than enhance efficiency and effectiveness due to redundancy costs and the political transaction costs associated with diverting resources away from a high‐performing partner to support their lower‐performing counterpart

On the Stability of the Excess Sensitivity of Aggregate Consumption Growth in the USA

This paper investigates whether there is time variation in the excess sensitivity of aggregate consumption growth to anticipated aggregate disposable income growth using quarterly US data over the period 1953-2014. Our empirical framework contains the possibility of stickiness in aggregate consumption growth and takes into account measurement error and time aggregation. Our empirical specification is cast into a Bayesian state-space model and estimated using Markov chain Monte Carlo (MCMC) methods. We use a Bayesian model selection approach to deal with the non-regular test for the null hypothesis of no time variation in the excess sensitivity parameter. Anticipated disposable income growth is calculated by incorporating an instrumental variables estimation approach into our MCMC algorithm. Our results suggest that the excess sensitivity parameter in the USA is stable at around 0.23 over the entire sample period