The pattern of the coefficient estimates for the tax variable is
also consistent with the model. The estimate of
g
0 is negative and
significant at the 0 percent level, and the estimate of
g˜
0 is positive,
much larger than the absolute value of
g
0, and significant at the 0
percent level. The estimated coefficient of the change in disposable
income, .00, is close to the value one would obtain by averaging
estimates from Euler equations on various countries, as obtained
for instance by Campbell and Mankiw [0000] or Jappelli and
Pagano [0000].