Capital account flows, consumption ratios and the middle-income trap

William R J Alexander; Daping Zhao; Sajid Anwar

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Capital account flows, consumption ratios and the middle-income trap

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Capital account flows, consumption ratios and the middle-income trap

William R J Alexander, Daping Zhao and Sajid Anwar

Proceedings of EcoMod 2017, International Conference on Economic Modeling

EcoMod 2017: International Conference on Economic Modelling (Ljubljana, Slovenia, 05-Jul-2017–07-Jul-2017)

EcoMod Network

2017

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Abstract

Economic Theory

Banking, Finance and Investment

middle-income trap

growth slow-down

consumption ratio

capital account flows

Using a sample of 31 OECD countries and 17 middle-income countries over the period 1950-2013, we carry out an empirical investigation of the relationship amongst domestic consumption, capital account flows and the growth rate of GDP. The main findings are that there is an inverted U-shaped relationship between the consumption ratio and economic growth, while capital outflow is positively associated with economic growth but capital inflow is associated with slower growth. These results hold in the full sample of countries, in the high-income group, the middle-income group and in a group that we define as middle-income trapped. An extreme bounds analysis indicates that the results are, for the most part, robust to the inclusion of a range of variables that have been found to be associated with growth in the literature.

Details

Title: Capital account flows, consumption ratios and the middle-income trap
Authors: William R J Alexander (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Daping Zhao (Author) - Shanghai Lixin University of Commerce, China
Sajid Anwar (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Publication details: Proceedings of EcoMod 2017, International Conference on Economic Modeling; 21
Conference details: EcoMod 2017: International Conference on Economic Modelling (Ljubljana, Slovenia, 05-Jul-2017–07-Jul-2017)
Publisher: EcoMod Network
Date published: 2017
Organisation Unit: School of Business and Creative Industries; Indigenous and Transcultural Research Centre; University of the Sunshine Coast, Queensland; USC Business School - Legacy
Language: English
Record Identifier: 99450465702621
Output Type: Conference paper

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