Interest elasticity of consumers’ expenditure

摘要: In this chapter some new evidence is presented on the subject of interest elasticity consumers’ expenditure based UK data. We find that, although issue by no means settled, weight does seem to favour what Boskin (1987) calls a ‘modest positive private saving’. Moreover, rate effects appear have increased (in both size and significance) during 1980s, period in which competition financial markets has as result Government’s policy deregulation. This liberalization led weakening liquidity constraints previously restricted households’ choice and, will had effect permitting consumers move closer their desired (life-cycle) levels (since they may now it easier borrow through periods when income temporarily low, thus maintaining smoother consumption profile over time), at same time proportion households that are likely react changes rates risen. Our findings suggest latter dominate, least short run, implying leverage monetary been strengthened deregulation markets.