How does excessive volatility of consumption vary across countries?

Khaliun Dovchinsuren

Japan and the World Economy, 2023, vol. 67, issue C

Abstract: I revisit the excess volatility of the consumption puzzle, a feature often observed in developing and emerging economies. I assess how the excess volatility of consumption varies across countries by incorporating interrelation between countries’ commodity dependence and income level. This is estimated in the context of the excess sensitivity of the consumption to output using cross-country panel data. I find that the sensitivity of consumption on the income level appears differently by the country’s commodity dependence. The sensitivity is higher in low-income groups for the commodity-dependent countries, whereas the opposite pattern is observed for non-commodity-dependent countries.

Keywords: Excess volatility of consumption; Commodity dependence; Low-income countries; Excess sensitivity of consumption (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:67:y:2023:i:c:s0922142523000312

DOI: 10.1016/j.japwor.2023.101205

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