Guglielmo is Professor of Econometrics at the University of Padua and a Research Associate of the IFS. His research interests are in consumption, saving and investment choices of households and economics of aging.
Education
PhD Economics, London School of Economics and Political Science, 1988
MSc Econometrics and Mathematical Economics, London School of Economics and Political Science, 1983
Laurea (Summa Cum Laude) Economics, Siena University, 1982
We argue that once one departs from simple classroom example, or 'stripped down life-cycle model', the empirical model for consumption growth can be made flexible enough to fit the main features of the data.
Two competing explanations of the UK consumer boom in the late 1980s are the financial liberalisation-imperfect housing market hypothesis of Muellbauer and Murphy and the expectations hypothesis of King. The authors use 15 years of Family Expenditure Surveys, and cohort analysis, to investigate to what extent these two hypotheses agree with observed changes in consumption patterns.
The availability of household-level data covering long periods of time makes it relatively easy to assess likely sources of aggregation bias. In this paper, the authors illustrate a promising methodology, which requires computing aggregation factors across households. If these factors are stable over time, aggregate data can be used to estimate micro-parameters.
The life-cycle model with liquidity constraints produces an Euler equation with unobservable Kuhn-Tucker multipliers. If borrowing restrictions depend on earnings and leisure is a choice variable one can derive an Euler equation involving only observable variables.
This paper presents estimates of the Euler equation on a pseudo (or "synthetic") panel of UK households. Most parameters are well determined and in agreement with the model's predictions. They can therefore be used to evaluate each cohort's Kuhn-Tucker multiplier over the sample period.
