Latin America and the Caribbean: Exploring consumption from the permanent income hypothesis

Authors

  • Luis Domingo Laino Guanes Fundación Manuel Gondra, Paraguay

Keywords:

Consumption, Permanent income, Panel data

Abstract

The object of this study is to verify the hypothesis of permanent income through a consumption function of Latin American and Caribbean countries. An equation that associates household consumption with current income and long-term income for data from 14 Latin American and Caribbean countries in the 20 years of the period 2004-2023 is proposed. Using the panel data technique, results that verify a strong relationship between consumption and current income exclusively are obtained, which is framed within the Keynesian theory and does not allow verification of compliance with the permanent income hypothesis.

Author Biography

Luis Domingo Laino Guanes, Fundación Manuel Gondra, Paraguay

Luis D. Laino holds a Ph.D. in Economic Sciences from the National University of Asunción, Paraguay. He has a Master’s degree in Economics from American University, Washington, DC, and a Bachelor’s degree in Economics from the Catholic University of Asunción, Paraguay. He has held positions at the Technical Planning Secretariat of Paraguay and has served as a Professor of Economics. He was Paraguay’s Chargé d'Affaires in Portugal and Ambassador to Cuba, Haiti, and the Dominican Republic. Currently, he is a business advisor and researcher at the Chaco American Research Center of the Manuel Gondra Foundation, Paraguay.

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Published

2025-07-02

Issue

No. 35 (2025): N° 35: JAN-JUN 2025

Section

Science article

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