@article{McKenzie:28398,
      recid = {28398},
      author = {McKenzie, David},
      title = {Consumption Growth in a Booming Economy: Taiwan 1976-96},
      address = {2001},
      number = {1858-2016-152697},
      series = {Center Discussion Paper No. 823},
      pages = {57},
      year = {2001},
      abstract = {Consumption and income have both grown rapidly in Taiwan  over the past forty years, with younger birth cohorts  experiencing faster growth. The long upward trend in  consumption presents a strong challenge to the consumption  smoothing predictions of the Permanent Income Hypothesis.  We investigate the extent to which consumption theory can  account for this trend in an environment where a large  majority of households have high savings rates. Household  survey data from 1976-96 are used to estimate dynamic  pseudo-panel models with inter-cohort heterogeneity. We  evaluate the impacts on consumption of migration,  mortality, household composition, liquidity constraints,  unanticipated aggregate shocks, hyperbolic discounting,  habit formation and precautionary saving. Taiwanese  consumption growth is found to result from high levels of  prudence, with the faster consumption growth of younger  cohorts attributed to their greater participation in  industries with more earnings risk.},
      url = {http://ageconsearch.umn.edu/record/28398},
      doi = {https://doi.org/10.22004/ag.econ.28398},
}