¹²Cointegration analysis is another standard method used in the current literature to study long-term MPCs. Nevertheless, given the relatively short time horizon, the data used in this paper does not allow for such an analysis. Additionally, cointegration analysis is intrinsically problematic. The most relevant problem with respect to income and wealth effect analysis is the requirement that the cointegrating vectors remain stable, which in turn requires a stable saving rate. This requirement, however, obviously runs contrary to what the data tells us, as illustrated in Figure 1.