1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Financial Market Liberalisation, Wealth and Consumption

The past two decades have seen substantial deregulation in the financial sectors of most OECD countries. The main motivation was to improve efficiency within the financial system, but the macroeconomic implications might go beyond this objective with impacts on the business cycle and the transmission mechanisms of monetary and fiscal policies. More specifically, financial liberalisation and heightened competition in the financial services sector, through a rapid expansion of credit, may have eased the liquidity constraints facing households, thus raising the targeted level of consumption. The objective of this paper is to test whether financial deregulation, through an easing of liquidity constraints, has had an impact on the relationship between consumption and income, and more specifically on the wealth effect. A range of different procedures is used to assess the impact of financial deregulation on global wealth and on its different components (financial, housing and others) ...

English

Keywords: wealth, financial liberalisation, consumption, house prices
JEL: E21: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Consumption; Saving; Wealth; D91: Microeconomics / Micro-Based Behavioral Economics / Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making; D12: Microeconomics / Household Behavior and Family Economics / Consumer Economics: Empirical Analysis
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