Rational International: A Cross-Country Study of the Permanent Income Hypothesis
This study investigates the validity of the Permanent Income Hypothesis (PIH) across seven countries from 1970 to 2021. Using Hall's random-walk model and Campbell and Mankiw’s IV model, I investigate if the consumption patterns align with the implications of the PIH and if there are differences between the countries studied. The analysis suggests evidence against the PIH, revealing deviat
