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Intertemporal substitution in the Spanish economy: Evidence from regional data
Author(s) -
Cutanda Tarín Antonio
Publication year - 2019
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12237
Subject(s) - economics , substitution (logic) , elasticity of substitution , consumption (sociology) , elasticity of intertemporal substitution , econometric model , order (exchange) , value (mathematics) , econometrics , aggregate (composite) , microeconomics , economy , macroeconomics , production (economics) , growth model , social science , materials science , finance , machine learning , sociology , computer science , composite material , programming language
This paper studies the intertemporal substitution in consumption and leisure for the Spanish economy by estimating the first‐order conditions of an individual optimization model with regional and aggregate data. While first‐order conditions determining intertemporal substitution in consumption show a good econometric fit, and the value we obtain for the intertemporal elasticity of substitution is similar to previously available results, the econometric fit of the intertemporal condition in leisure indicates that the behaviour of the Spanish labour supply over the cycle is more complex than can be explained by the canonical intertemporal choice model.