shortly after the publication of the book, and was key in the development and diffusion
of Bayesian ideas in econometrics. It was, however, the problem of dynamic specification
that initially received the greatest attention. In an important paper, Brown (1952)
modelled the hypothesis of habit persistence in consumer behaviour by introducing lagged
values of consumption expenditures into an otherwise static Keynesian consumption function.
This was a significant step towards the incorporation of dynamics in applied econometric
research and allowed the important distinction to be made between the short-run
and the long-run impacts of changes in income on consumption. Soon other researchers
followed Brown’s lead and employed his autoregressive specification in their empirical
work.