The interest rate elasticity of aggregate consumption : a time varying parameter approach
AbstractThe aim of this note is to examine whether the empirically documented positive interest rate elasticity of aggregate consumption in Finland is an artefact due to the previously widespread credit rationing. The aim is carried out using a novel time valying parameter approach and data from the period 1960-1989. The empirical evidence lendsfurther support for apositive interest rate elasticity of aggregate consumption. The elasticity seems to have increased over time, especially in recent years. To some extent, this mirrors a gradual easening up of credit rationing, which has been particularly rapid in recent years.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 4 (1991)
Issue (Month): 2 (Autumn)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jappelli, Tullio & Pagano, Marco, 1989.
"Consumption and Capital Market Imperfections: An International Comparison,"
American Economic Review,
American Economic Association, vol. 79(5), pages 1088-1105, December.
- Jappelli, Tullio & Pagano, Marco, 1988. "Consumption and Capital Market Imperfection: An International Comparison," CEPR Discussion Papers 244, C.E.P.R. Discussion Papers.
- Eytan Sheshinski & Vito Tanzi, 1989. "An Explanation of the Behavior of Personal Savings in the United States in Recent Years," NBER Working Papers 3040, National Bureau of Economic Research, Inc.
- Koskela, Erkki & Viren, Matti, 1982. " Inflation, Tight Money and Household Saving Behavior: Finnish Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 84(3), pages 483-92.
- Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-44, January.
- Jackman, Richard & Sutton, John, 1982. "Imperfect Capital Markets and the Monetarist Black Box: Liquidity Constraints, Inflation and the Asymmetric Effects of Interest Rate Policy," Economic Journal, Royal Economic Society, vol. 92(365), pages 108-28, March.
- Koskela, Erkki & Viren, Matti, 1985. "Consumption Function, Labour Supply Rationing and Borrowing Constraints," Oxford Economic Papers, Oxford University Press, vol. 37(3), pages 500-509, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial Secretary).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.