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Accounting for Consumption Volatility Differences


  • Holger Wolf

    (International Monetary Fund)


In the wake of emerging market turmoil, the role and welfare consequences of volatility have attracted renewed attention. An emerging consensus points to various types of volatility being both a consequence and a determinant of longerterm growth performance. The linkages appear to be context dependent. This paper employs classification tree analysis to explore determinants of consumption volatility taking account of context dependence. The results suggest output volatility, measures of input volatility, and measures of economic development are best able to differentiate between countries with high and low consumption volatility.

Suggested Citation

  • Holger Wolf, 2004. "Accounting for Consumption Volatility Differences," IMF Staff Papers, Palgrave Macmillan, vol. 51(s1), pages 109-125, June.
  • Handle: RePEc:pal:imfstp:v:51:y:2004:i:s1:p:109-125

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    References listed on IDEAS

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    Cited by:

    1. Dionysios K. Solomos & Dimitrios N. Koumparoulis, 2013. "Financial Sector and Business Cycles Determinants in the EMU: An Empirical Approach (1996-2011)," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 34-58.
    2. Combes, Jean-Louis & Ebeke, Christian, 2011. "Remittances and Household Consumption Instability in Developing Countries," World Development, Elsevier, vol. 39(7), pages 1076-1089, July.
    3. Chantal Dupasquier & Patrick N. Osakwe, 2006. "Trade Regimes, Liberalization and Macroeconomic Instability in Africa," Development Economics Working Papers 21823, East Asian Bureau of Economic Research.
    4. Guillermo Larrain & Mariel Siravegna & Guillermo Yañez, 2009. "Intégration aux marchés financiers internationaux et lissage de la consommation : observations récentes en Amérique latine," Revue d'Économie Financière, Programme National Persée, vol. 95(2), pages 87-108.

    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles


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