Gomme, Paul and Zhao, Yan (2010): The volatility of consumption and output with increasing industrialization.
Download (198kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||The volatility of consumption and output with increasing industrialization|
|Keywords:||Consumption volatility; Industralization|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth|
|Depositing User:||Yan Zhao|
|Date Deposited:||26 Sep 2011 11:59|
|Last Modified:||16 Jan 2016 12:09|
Aguiar, M. and Gopinath, G. (2007). Emerging market business cycles: The cycle is the trend. The Journal of Political Economy, 115(1):69–102.
Backus, D. K., Kehoe, P. J., and Kydland, F. E. (1992). International real business cycles. The Journal of Political Economy, 100:745–775.
Gomme, P., Kydland, F. E., and Rupert, P. (2001). Home production meets time to build. The Journal of Political Economy, 109(5):1115–1131.
Gomme, P. and Rupert, P. (2007). Theory,measurement and calibration of macroeconomic models. Journal of Monetary Economics, 54:460–497.