Why Surplus Consumption in the Habit Model May be Less Persistent than You Think
---- Acknowledgements -----
The authors would like to thank Stijn Van Nieuwerburgh, Greg Du®ee, and participants at two NYU seminars, the Wharton Brown Bag Macro Seminar, and a session of the 2011 AFA Meetings for helpful comments and suggestions. All remaining errors are of course the authors' responsibility. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.