Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper calculates the stochastic properties of consumption when income follows a fractionally differenced process. It shows how such a process may resolve Angus Deaton's (1987) excessive smoothness paradox while assuming both the permanent income hypothesis and a univariate process for income. Tests and simulations suggest the evidence is consistent with income following such a process. Copyright 1993 by MIT Press.