697 research outputs found
Recommended from our members
Integrating risks of climate change into water management
[No abstract available
Re-examining the consumption-wealth relationship : the role of model uncertainty
This paper discusses the consumption-wealth relationship. Following the recent influential workof Lettau and Ludvigson [e.g. Lettau and Ludvigson (2001), (2004)], we use data on consumption, assets andlabor income and a vector error correction framework. Key …ndings of their work are that consumption doesrespond to permanent changes in wealth in the expected manner, but that most changes in wealth are transitoryand have no e¤ect on consumption. We investigate the robustness of these results to model uncertainty andargue for the use of Bayesian model averaging. We …nd that there is model uncertainty with regards to thenumber of cointegrating vectors, the form of deterministic components, lag length and whether the cointegratingresiduals a¤ect consumption and income directly. Whether this uncertainty has important empirical implicationsdepends on the researcher's attitude towards the economic theory used by Lettau and Ludvigson. If we workwith their model, our findings are very similar to theirs. However, if we work with a broader set of models andlet the data speak, we obtain somewhat di¤erent results. In the latter case, we …nd that the exact magnitudeof the role of permanent shocks is hard to estimate precisely. Thus, although some support exists for the viewthat their role is small, we cannot rule out the possibility that they have a substantive role to play
Recommended from our members
Integrating risks of climate change into water management
The Working Group II contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change critically reviewed and assessed tens of thousands of recent publications to inform about the assess current scientific knowledge on climate change impacts, vulnerability and adaptation. Chapter 3 of the report focuses on freshwater resources, but water issues are also prominent in other sectoral chapters and in the regional chapters of the Working Group II report as well as in various chapters of Working Group I. With this paper, the lead authors, a review editor and the chapter scientist of the freshwater chapter of the WGII AR5 wish to summarize their assessment of the most relevant risks of climate change related to freshwater systems and to show how assessment and reduction of those risks can be integrated into water management
Bootstrapping Smooth Functions of Slope Parameters and Innovation Variances in VAR(∞) Models *
Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/101814/1/1468-2354.t01-1-00016.pd
- …