On the intertemporal elasticity of substitution under nonhomothetic utility
Pengarang:
Okubo, Masakatsu -
Deskripsi
In this note, we use a model with nonseparable and nonhomothetic preferences to estimate the intertemporal elasticity of substitution (IES). We show that, while the homothetic utility model may induce a bias that increases the elasticity of substitution between nondurables and durables, the estimated IES remains positive and significant..Printed journal