Consumption, Income, and International Capital Market Integration
AbstractThis paper uses consumption patterns across countries to measure capital market integration. It argues that earlier empirical tests of this type were potentially misspecified and proposes a more robust specification. The results indicate that Japan was the only industrialized country for which national consumption was fully integrated with the rest of the world over the period 1973-92. The main source of failure is excess sensitivity of consumption to home income. Particularly within the European Community, however, there is also evidence that real interest rates are not equalized.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal International Monetary Fund Staff Papers.
Volume (Year): 42 (1995)
Issue (Month): 3 (September)
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Other versions of this item:
- Ronald MacDonald & Tamim Bayoumi, 1994. "Consumption, Income, and International Capital Market Integration," IMF Working Papers 94/120, International Monetary Fund.
- Bayoumi, Tamim, 1994. "Consumption, Income, and International Capital Market Integration," CEPR Discussion Papers 1028, C.E.P.R. Discussion Papers.
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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