| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5054618 | Economic Modelling | 2013 | 5 Pages |
â¢We explore the connection between the average propensity to consume (APC) and wealth to income ratio (WY) in the US.â¢We estimate a threshold vector error correction model.â¢There is evidence of cointegration.â¢We find that the APC rather than WY responds to long-run disequilibrium.â¢The speed of APC adjustment is fastest in regimes characterised by a high or increasing APC and/or low or decreasing WY.
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.
