Expected consumption growth from cross-country surveys
Subtitle: implications for assessing international capital markets
By: Charles Engel and John H. Rogers.
Contributors: Rogers, John H.
Series: International finance discussion papers -- no. 949; International finance discussion papers (Online) -- no. 949.
Publisher: Federal Reserve Board
Published: 2008
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "Survey data show that the expected growth rates of consumption across countries vary widely and are not highly correlated.  This data contradicts the simplest of open-economy models in which there is a freely traded non- state-contingent bond and purchasing power parity holds.  We explore two alternative explanations for the finding: that households in each country in effect face different ex ante real interest rates or that there are significant credit constraints, so that expected consumption growth rates are driven largely by expected income growth.  The empirical evidence strongly supports the latter hypothesis.  These findings challenge the modeling of consumption that is at the heart of many, if not most, macroeconomic models"--Federal Reserve Board web site.
Notes: Title from PDF file as viewed on 6/18/2009.

Includes bibliographical references.

Also available in print.

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Mode of access: World Wide Web.