Publication:
How Does the Sensitivity of Consumption to Income Vary Over Time?: International Evidence

Simple item page
dc.contributor.authorIslamaj, Ergys
dc.contributor.authorKose, M. Ayhan
dc.date.accessioned2016-05-04T21:41:10Z
dc.date.available2016-05-04T21:41:10Z
dc.date.issued2016-04
dc.description.abstractThis paper studies how the sensitivity of consumption to income has changed over time as the degree of financial integration has risen. In standard theory, greater financial integration facilitates international borrowing and lending, helping to reduce the sensitivity of consumption growth to fluctuations in income. The paper examines the empirical validity of this prediction using an array of indicators of financial integration for a large sample of advanced and developing countries over the period 1960-2011. Two main results are reported. First, the sensitivity of consumption to income has declined over time as the degree of financial integration has risen. The decline has been more pronounced in advanced economies than in developing ones. Second, the regression analysis indicates that a higher degree of financial integration is associated with a lower sensitivity of consumption to income. This finding is robust to the use of a wide range of empirical specifications, country-specific characteristics, and other controls, such as interest rates and outcome-based measures of financial integration. The paper also discusses other potential sources of the temporal changes in the sensitivity of consumption to income.en
dc.identifierhttp://documents.worldbank.org/curated/en/2016/05/26330512/sensitivity-consumption-income-vary-over-time-international-evidence
dc.identifier.doi10.1596/1813-9450-7659
dc.identifier.urihttps://hdl.handle.net/10986/24234
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7659
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectPER CAPITA CONSUMPTION
dc.subjectNATIONAL OUTPUT
dc.subjectGROWTH RATES
dc.subjectMONETARY POLICY
dc.subjectCLOSED ECONOMIES
dc.subjectDEPOSITS
dc.subjectLAGS
dc.subjectINTERNATIONAL CAPITAL
dc.subjectMONETARY ECONOMICS
dc.subjectDISPOSABLE INCOME
dc.subjectINCOME
dc.subjectINTEREST
dc.subjectRATE OF RETURN
dc.subjectINTEREST RATE
dc.subjectEXCHANGE
dc.subjectSTOCK MARKET
dc.subjectDISCOUNT RATE
dc.subjectECONOMIC REVIEW
dc.subjectLIQUIDITY
dc.subjectDEVELOPING COUNTRIES
dc.subjectEQUITY MARKET
dc.subjectEXPORTS
dc.subjectELASTICITY
dc.subjectNEGATIVE LINK
dc.subjectPOLITICAL ECONOMY
dc.subjectDEVELOPING ECONOMIES
dc.subjectPORTFOLIO
dc.subjectINTERNATIONAL BUSINESS
dc.subjectINTERNATIONAL EQUITY
dc.subjectOPTIMIZATION
dc.subjectCROSS-COUNTRY CORRELATION
dc.subjectINCENTIVES
dc.subjectPOLICY DISCUSSIONS
dc.subjectVARIABLES
dc.subjectPRICE
dc.subjectREAL INCOME
dc.subjectFINANCIAL INTEGRATION
dc.subjectCONSUMPTION GROWTH
dc.subjectPAYMENTS
dc.subjectWEALTH
dc.subjectSAVING
dc.subjectAGGREGATE INCOME
dc.subjectEMPIRICAL LITERATURE
dc.subjectDEVELOPING COUNTRY
dc.subjectEMPIRICAL ANALYSIS
dc.subjectDEVELOPMENT
dc.subjectADVANCED COUNTRIES
dc.subjectFOREIGN TRADE
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectSAVINGS
dc.subjectGLOBAL ECONOMY
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectNEGATIVE IMPACT
dc.subjectADVANCED ECONOMIES
dc.subjectEXCHANGE RATES
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectPRODUCTIVITY
dc.subjectECONOMETRICS
dc.subjectINTEREST RATES
dc.subjectINTEREST RATE SHOCKS
dc.subjectGLOBALIZATION
dc.subjectDEBT
dc.subjectMEASUREMENT ERROR
dc.subjectFOREIGN ASSETS
dc.subjectOPEN ECONOMY
dc.subjectBUSINESS CYCLE
dc.subjectPRODUCT
dc.subjectREAL INTEREST RATE
dc.subjectRISK SHARING
dc.subjectUTILITY
dc.subjectCROSS-COUNTRY INCOME
dc.subjectFINANCIAL SYSTEM
dc.subjectSERIAL CORRELATION
dc.subjectLIBERALIZATION
dc.subjectECONOMIC RESEARCH
dc.subjectEQUITY
dc.subjectDATA AVAILABILITY
dc.subjectCONSUMPTION
dc.subjectBOND MARKETS
dc.subjectCAPITAL CONTROLS
dc.subjectCREDIT CONSTRAINTS
dc.subjectCAPITAL
dc.subjectMARKET INTEREST
dc.subjectVOLATILITY
dc.subjectCOUNTRY RISK
dc.subjectRAPID INCREASE
dc.subjectFUTURE
dc.subjectDEPENDENT VARIABLE
dc.subjectINCOME SHOCKS
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectCREDIT
dc.subjectMACROECONOMICS
dc.subjectPOLITICAL SCIENCE
dc.subjectPERMANENT INCOME
dc.subjectUTILITY FUNCTION
dc.subjectDYNAMIC PANEL
dc.subjectAGGREGATE DEMAND
dc.subjectREAL RATE
dc.subjectECONOMY
dc.subjectPOSITIVE CORRELATION
dc.subjectAGGREGATE OUTPUT
dc.subjectMEASUREMENT
dc.subjectSHARES
dc.subjectASSETS
dc.subjectREAL EXCHANGE RATE
dc.subjectBENCHMARK
dc.subjectTRADE LIBERALIZATION
dc.subjectHIGH CORRELATION
dc.subjectMONETARY POLICIES
dc.subjectEQUAL WEIGHTS
dc.subjectINTERNATIONAL PORTFOLIO
dc.subjectOUTPUT
dc.subjectCLOSED ECONOMY
dc.subjectREGRESSION ANALYSIS
dc.subjectINSURANCE
dc.subjectBUSINESS CYCLES
dc.subjectPERMANENT INCOME HYPOTHESIS
dc.subjectTRADE
dc.subjectFUTURE STUDIES
dc.subjectGDP
dc.subjectTHEORY
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectEQUITY MARKETS
dc.subjectINVESTMENT
dc.subjectBOND
dc.subjectRANDOM WALK
dc.subjectSHARE
dc.subjectBANKING
dc.subjectPRIVATE CONSUMPTION
dc.subjectDYNAMIC PANEL FRAMEWORK
dc.subjectCAPITAL ACCOUNTS
dc.subjectPOLICY RESEARCH
dc.subjectEXCHANGE RATE
dc.subjectRISK AVERSION
dc.subjectLIABILITIES
dc.subjectOPEN ECONOMIES
dc.subjectMACROECONOMIC PERFORMANCE
dc.subjectCAPITAL ACCOUNT
dc.subjectDEVELOPMENT POLICY
dc.subjectFUTURE RESEARCH
dc.titleHow Does the Sensitivity of Consumption to Income Vary Over Time?en
dc.title.subtitleInternational Evidenceen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleHow Does the Sensitivity of Consumption to Income Vary Over Time? International Evidence
okr.date.disclosure2016-04-29
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2016/05/26330512/sensitivity-consumption-income-vary-over-time-international-evidence
okr.guid309571468001185712
okr.identifier.doi10.1596/1813-9450-7659
okr.identifier.externaldocumentum090224b0842e2c1c_1_0
okr.identifier.internaldocumentum26330512
okr.identifier.reportWPS7659
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2016/04/29/090224b0842e2c1c/1_0/Rendered/PDF/How0does0the0s0ternational0evidence.pdfen
okr.topicMacroeconomics and Economic Growth::Consumption
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicInternational Economics and Trade::Globalization and Financial Integration
okr.unitDevelopment Prospects Group, Development Economics
relation.isAuthorOfPublicationac9fefe8-9d4d-555d-bb68-f056fd7a3790
relation.isAuthorOfPublication.latestForDiscoveryac9fefe8-9d4d-555d-bb68-f056fd7a3790
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
How0does0the0s0ternational0evidence.pdf
Size:
1.13 MB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
How0does0the0s0ternational0evidence.txt
Size:
86.67 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Policy Research Working Papers