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- Financial Liberalisation, Consumption And Wealth Effects In 7 OECD Countries
Financial Liberalisation, Consumption and Wealth Effects in 7 OECD countries
Related Themes
Macro-Economic Dynamics and PolicyJEL Code
E21, G21
Journal
Scottish Journal of Political Economy
Paper Category Number
247
We 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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