Financial Liberalisation, Consumption and Wealth Effects in 7 OECD Countries
AbstractWe estimate the impact of financial liberalisation on consumption in 7 major industrial countries, and find a marked shift in behaviour, notably a decline in short run income elasticities and a rise in short run wealth and interest rate elasticities. A corollary is that consumption equations estimated over both pre- and post-liberalisation regimes may be misleading, and either a form of testing as presented here or a shortening of the sample period may be appropriate for accurate forecasting and simulation.
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Bibliographic InfoPaper provided by National Institute of Economic and Social Research in its series NIESR Discussion Papers with number 247.
Date of creation: May 2004
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