TY  - JOUR
AU  - Hall,Robert E.
TI  - Intertemporal Substitution in Consumption
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 720
PY  - 1988
Y2  - December 1988
UR  - http://www.nber.org/papers/w0720
L1  - http://www.nber.org/papers/w0720.pdf
N1  - Author contact info:
Robert E. Hall
Hoover Institution
Stanford University
Stanford, CA  94305-6010
Tel: 650/723-2215
E-Mail: rehall@gmail.com
AB  - Does a higher real interest rate induce significant postponement of consumption? According to the theory developed here, this question can be answered by studying the relation between the rate of growth of consumption and expected real interest rates. In postwar data for the United States, expected real returns have declined over time in the stock market and for savings accounts. Over the same period, the rate of growth of consumption has been almost steady. The paper concludes that intertemporal substitution is weak, for if it were strong, the growth rate of consumption would have declined.
ER  -