NBER Working Papers by Tullio Jappelli

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Working Papers

February 2010The Consumption Response to Income Changes
with Luigi Pistaferri: w15739
We review different empirical approaches that researchers have taken to estimate how consumption responds to income changes. We critically evaluate the empirical evidence on the sensitivity of consumption to predicted income changes, distinguishing between the traditional excess sensitivity tests, and the effect of predicted income increases and income declines. We also review studies that attempt to estimate the marginal propensity to consume out of income shocks, distinguishing between three different approaches: identifying episodes in which income changes unexpectedly, relying on the covariance restrictions that the theory imposes on the joint behavior of consumption and income growth, and combining realizations and expectations of income or consumption in surveys where data on subject...

Published: Tullio Jappelli & Luigi Pistaferri, 2010. "The Consumption Response to Income Changes," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 479-506, 09. citation courtesy of

September 2005Searching for Non-Monotonic Effects of Fiscal Policy: New Evidence
with Francesco Giavazzi, Marco Pagano, Marina Benedetti: w11593
Data revisions and the availability of a longer sample offer the opportunity to reconsider the empirical findings that suggest that in the OECD countries national saving responds non-monotonically to fiscal policy. The paper confirms that the circumstance most likely to give rise to a non-monotonic response of national saving to a fiscal impulse is a "large and persistent impulse", defined as one in which the full employment surplus, as a percent of potential output, changes by at least 1.5 percentage points per year over a two-year period. This particular circumstance remains the only statistically significant one even when we allow for non-monotonic responses to arise when public debt is growing rapidly or interest rate spreads are widening. We find that non-monotonic responses are simil...

Published: Giavazzi, Francesco & Jappelli, Tullio & Pagano, Marco & Benedetti, Marina, 2005. "Searching for Non-monotonic Effects of Fiscal Policy: New Evidence," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 23(S1), pages 197-217, October. citation courtesy of

January 2000Searching for Non-Linear Effects of Fiscal Policy: Evidence from Industrial and Developing Countries
with Francesco Giavazzi, Marco Pagano: w7460
Several recent studies suggest that the response of national saving to fiscal policy may be non-linear. In this paper we use two data sets to search for the circumstances in which such non-linear responses may arise: a sample of OECD countries used in previous studies, and sample of developing countries, using more recent World Bank data. We find that in both samples non-linear effects tend to be associated with large and persistent fiscal impulses. In the OECD sample the non-linearity of the response is stronger for fiscal contractions than for expansions. An increase in net taxes has no effect on national saving during large fiscal contractions, while it has a positive effect in less pronounced contractions. High or rapidly growing public debt does not appear to be a good predictor ...

Published: Giavazzi, Francesco, Tullio Jappelli and Marco Pagano. "Searching For Non-Linear Effects Of Fiscal Policy: Evidence From Industrial And Developing Countries," European Economic Review, 2000, v44(7,Jun), 1291-1326. citation courtesy of

May 1998Intertemporal Choice and the Cross-Sectional Variance of Marginal Utility
with Orazio P. Attanasio: w6560
The theory of intertemporal choice predicts that the cross-sectional variance of the marginal utility of consumption is equal to its own lag plus a constant and a random component. Using general preference specifications and some assumptions about the nature of the random component, we provide an explicit test of this hypothesis. Our approach circumvents the necessity to identify a pure age profile of the cross-sectional variance of consumption and yields a well-specified statistical test. This test is applied to data from the United States, the United Kingdom and Italy. The results are remarkably consistent with the restrictions implied by the theory of intertemporal consumption choices.

Published: Attanasio, Orazio P. and Tullio Jappelli. "Intertemporal Choice And The Cross-Sectional Variance Of Marginal Utility," Review of Economics and Statistics, 2001, v83(1,Feb), 13-27. citation courtesy of

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