Financial Openess Aggregate Consumption and Threshold Effects

Marwân-al-Qays Bousmah () and Daria Onori

Working Papers from HAL

Abstract: We analyze the influence of financial openness on the level of aggregate consumption. We construct a complete and balanced panel dataset of 88 countries for the period 1980-2010, and then differentiate between four groups of countries. Models for non stationary heterogeneous panels, as well as panel threshold regression models, are used to estimate the determinants of aggregate consumption. The core finding of the paper is that the financial openness effect on consumption changes in the course of economic development, with the level or per capita income acting as a threshold which is consistently estimated within the model. The openness effect is non homogeneous across groups, stronger for low levels of per capita income, and diminishes as income rises, providing novel insights about the welfare effect of financial liberalization.

Keywords: Financial openness; Aggregate consumption; Dynamic panel threshold model. (search for similar items in EconPapers)
Date: 2016-01-06
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01251342
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Related works:
Journal Article: Financial Openness, Aggregate Consumption and Threshold Effects (2016)
Working Paper: Financial Openness, Aggregate Consumption and Threshold Effects (2016)
Working Paper: Financial Openness, Aggregate Consumtion and Threshold Effects (2015)
Working Paper: Financial Openness, Aggregate Consumption, and Threshold Effects (2015)
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