Mean-reverting behavior of consumption-income ratio in OECD countries: evidence from SURADF panel unit root tests

Shu-Yi Liao (), Mao-Lung Huang () and Lan-Hsun Wang ()
Additional contact information
Shu-Yi Liao: Department of Applied Economics, National Chung Hsing University, Taiwan
Mao-Lung Huang: Department of Applied Economics, National Chung Hsing University, Taiwan
Lan-Hsun Wang: Bachelor''''s Degree Program of Hotel Management, Tainan University of Technology, Taiwan

Economics Bulletin, 2011, vol. 31, issue 1, 679-686

Abstract: This paper examines the existence of the mean-reverting behavior of the consumption-income ratio from a panel of 24 OECD countries through the application of the series-specific SURADF panel unit root test. The results show that the consumption-income ratios in 22 OECD countries exhibit mean-reverting behavior. Furthermore, the half-life of the consumption-income ratio for these 22 OECD countries is between 0.28 to 3.48 years. This implies that policy shocks in industrialized economies are not likely to have permanent effects on the consumption-income ratio.

Keywords: Mean reversion; Consumption-income ratio; SURADF; Half-life (search for similar items in EconPapers)
JEL-codes: C2 E2 (search for similar items in EconPapers)
Date: 2011-02-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I1-P65.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-10-00120

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().