This paper examines the relationship between expected real interest rates and the growth rate of consumption, testing the hypothesis that changes in real interest rates significantly affect intertemporal substitution in consumption. Using postwar U.S. data, the author finds that while expected real returns from stocks and savings accounts have declined, the growth rate of consumption has remained relatively stable. This suggests that intertemporal substitution is weak, with the elasticity of substitution unlikely to be much above 0.1 and possibly zero. The paper also discusses the theoretical framework, distinguishing intertemporal substitution from risk aversion, and presents econometric results supporting the conclusion that the elasticity of substitution is small. The findings have implications for understanding the role of consumption in economic fluctuations and the effectiveness of intergenerational redistribution policies.This paper examines the relationship between expected real interest rates and the growth rate of consumption, testing the hypothesis that changes in real interest rates significantly affect intertemporal substitution in consumption. Using postwar U.S. data, the author finds that while expected real returns from stocks and savings accounts have declined, the growth rate of consumption has remained relatively stable. This suggests that intertemporal substitution is weak, with the elasticity of substitution unlikely to be much above 0.1 and possibly zero. The paper also discusses the theoretical framework, distinguishing intertemporal substitution from risk aversion, and presents econometric results supporting the conclusion that the elasticity of substitution is small. The findings have implications for understanding the role of consumption in economic fluctuations and the effectiveness of intergenerational redistribution policies.