Consumption tilting and the current account: Evidence from Canada

Rebecca Braeu

International Review of Economics & Finance, 2010, vol. 19, issue 2, 304-312

Abstract: This paper estimates the consumption tilting motive in Canada. A common empirical technique (vector-error correction model) is applied to a well-established theory (the small-open economy present-value model) in order to estimate the long-run behavior of the current account. The results suggest that households are patient. They modify intertemporal consumption profiles in order to tilt consumption toward the future through the accumulation of wealth, which improves the current account in the long run.

Keywords: Current; account; Wealth; Consumption; tilting; Cointegration (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059-0560(09)00059-8
Full text for ScienceDirect subscribers only

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:eee:reveco:v:19:y:2010:i:2:p:304-312

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().