The Aggregate Consumption Puzzle In Singapore
AbstractWe draw attention to an apparent puzzle in the aggregate consumption behaviour of Singaporeans. In stark contrast to the rest of the world, the average propensity to consume has plummeted to a record low of two-fifths of income in 2000 leaving the economy without a good built-in stabilizer. This phenomenon is a notable departure from the stable long-run equilibrium relationship between consumption, disposable income and wealth observed elsewhere. The explanation of this puzzle is the main focus of the paper but we also draw attention to some policy measures that may reverse the process
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Bibliographic InfoPaper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0213.
Length: 20 pages
Date of creation: 2002
Date of revision:
consumption function; average propensity to consume; cointegrating relation; asset price inflation;
Other versions of this item:
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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