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Working Paper

Stochastic Interest Rates in the Aggregate Life Cycle/Permanent Income Cum Rational Expectations Model

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An estimation of the life cycle/permanent income model with rational expectations that allows for uncertain future interest rates. Results provide ample evidence to reject this form of model during the postwar period.
10.01.1985WP 85-06
Suggested Citation

Kowalewski, Kim J. 1985. “Stochastic Interest Rates in the Aggregate Life Cycle/Permanent Income Cum Rational Expectations Model.” Federal Reserve Bank of Cleveland, Working Paper No. 85-06.