IDEAS home Printed from https://ideas.repec.org/p/ekd/010027/10380.html
   My bibliography  Save this paper

Capital account flows, consumption ratios and the middle-income trap

Author

Listed:
  • Robert Alexander
  • Daping Zhao, Shanghai Lixin University of Commerce
  • Sajid Anwar, University of the Sunshine Coast

Abstract

Using a sample of 31 OECD countries and 17 middle-income countries over the period 1950-2013, we carry out an empirical investigation of the relationship amongst domestic consumption, capital account flows and the growth rate of GDP. The main findings are that there is an inverted U-shaped relationship between the consumption ratio and economic growth, while capital outflow is positively associated with economic growth but capital inflow is associated with slower growth. These results hold in the full sample of countries, in the high-income group, the middle-income group and in a group that we define as middle-income trapped. An extreme bounds analysis indicates that the results are, for the most part, robust to the inclusion of a range of variables that have been found to be associated with growth in the literature. See full paper attached. See results in full paper attached.

Suggested Citation

  • Robert Alexander & Daping Zhao, Shanghai Lixin University of Commerce & Sajid Anwar, University of the Sunshine Coast, 2017. "Capital account flows, consumption ratios and the middle-income trap," EcoMod2017 10380, EcoMod.
    • Handle: RePEc:ekd:010027:10380
    as

    Download full text from publisher

    File URL: http://ecomod.net/system/files/MITRAP_ECOM.docx
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    Various; Developing countries; Macroeconometric modeling;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ekd:010027:10380. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Theresa Leary (email available below). General contact details of provider: https://edirc.repec.org/data/ecomoea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.