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This paper investigates whether there are variants of the permanent income model that are consistent with seasonally unadjusted quarterly postwar Canadian data. The analysis is based on a misspecification-test equation which nets the standard permanent income model. The results obtained are somewhat unfavourable to the permanent-income hypothesis. The same results also apply to more general models in which the real interest rate is time-varying and the utility function is non-separable in consumption and the stock of durable goods.

We examine the theoretical, empirical, and public policy implications of the proportion of females in the establishment. Arrow's model of heterogeneous employer discrimination provides predictions that are tested. Empirical results indicate support for the theory using establishment data, but a contradiction is obtained with the individual data. It is estimated that the proportion of females in the establishment accounts for 26 per cent of the gender log wage gap. Implications for employment equity are considered in the context of a new method of decomposing the log wage gap and indicate that such public policy can reduce this gap by 20 per cent.

Considers a general permanent-income model in which a fraction of consumers in the economy is liquidity constrained using the Canadian evidence. Consumption growth rate for these individuals; Interest-rate coefficient predicted to be smaller in the presence of liquidity constraints; Structural changes over the sample period, which are associated with the 1982 recession.