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Fábio A. R. Gomes
''Consumption function: nondurable and durable goods''
( 2022, Vol. 42 No.2 )
Modeling the consumption of nondurable and durable goods separately is equivalent to assuming that consumers` resources exclusively finance one category of goods. To overcome this problem, I modelled these decisions jointly. Not by chance, the new consumption functions for nondurable and durable goods depend not only on consumers` resources, but also on the lagged stock of durable goods.
Keywords: Consumption function, nondurable goods, durable goods, consumption persistence
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
D1 - Household Behavior: General
Manuscript Received : Mar 10 2021 Manuscript Accepted : Jun 30 2022

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