Munich Personal RePEc Archive

The volatility of consumption and output with increasing industrialization

Gomme, Paul and Zhao, Yan (2010): The volatility of consumption and output with increasing industrialization.

[img]
Preview
PDF
MPRA_paper_33721.pdf

Download (198kB) | Preview

Abstract

Consumption is more volatile than output in developing countries while it is less volatile than output in developed economies. This paper shows that the relatively large home sector in developing economies contributes to this difference, and the driving force for this difference is technology. Thus this paper suggests that volatile market consumption is almost inevitable at the start of industrialization, when the technology level in the market sector is just above that of the home sector.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.