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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Consumption, Leisure and Borrowing Constraints, B.E. Journal of Macroeconomics 1 (Topics) Article 10, May (2012). Kilponen, Juha

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Kilponen, Juha 
Number of authors
Status Published
Year of publication 2012 
Date 10.05.2012 
Name of article Consumption, Leisure and Borrowing Constraints 
Name of journal B.E. Journal of Macroeconomics
Volume of issue 12 
Number of issue 1 (Topics) Article 10, May 
Pages 1-23 
Abstract We derive and estimate an aggregate Euler consumption equation in which non-separability between consumption and leisure and borrowing constrained households makes current consumption dependent on labour and asset (house) prices. Estimation results suggest that when labour is included in the aggregate consumption equation it proves to be more important than house prices in explaining the wide fluctuations in Finnish consumption data. Moreover, the evidence of excess sensitivity of consumption to income virtually disappears as the consumption Euler equation accounts for predictable changes in labour in the Finnish data.
Free text descriptor in English housing; financial distress; excess sensitivity of consumption; collateral constraints; non-separability; intertemporal elasticity of substitution 
ISSN / e-ISSN 1935-1690 
auki Internet addresses
Additional information Online 10 May 2012
Notes Revision to BOF DP 9/2009