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A note on the average propensity to consume, wealth and threshold adjustment

Abstract
We explore the connection between the average propensity to consume (APC) and wealth to income ratio (WY) in the US. We find evidence of a long-run relationship characterised by threshold error correction. It is the APC that responds to long-run disequilibrium where the speed of adjustment is asymmetric insofar as being most likely fastest in regimes characterised by a high APC and low WY.
Type
Journal Article
Type of thesis
Series
Citation
Holmes, M. J., & Shen, X. (2013). A note on the average propensity to consume, wealth and threshold adjustment. Economic Modelling, 35, 309-313.
Date
2013
Publisher
Elsevier
Degree
Supervisors
Rights
Publisher version