Effects of transitory shocks to aggregate output on consumption in poor countries

• 成果类型: Article
• 署名作者: Brueckner, Markus; Gradstein, Mark
• 署名单位: National University of Singapore; Ben-Gurion University of the Negev
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2013.07.008
• 发表日期: 2013
• 页码: 343-357
• 关键词: Transitory output shocks; consumption; risk sharing; Net current transfers; International capital flows; permanent income hypothesis

摘要

This paper provides instrumental variables estimates of the response of aggregate private consumption to transitory output shocks in poor countries. To identify exogenous, unanticipated, idiosyncratic and transitory variations in national output we use year-to-year variations in rainfall as an instrumental variable in a panel of 39 sub-Saharan African countries during the period 1980-2009. Our estimates yield a marginal propensity to consume out of transitory output of around 0.2. To explain this result we show, using instrumental variables techniques, that there is a significant negative effect of transitory output shocks on net current transfers and a significant positive and quantitatively large effect on the trade balance. An important implication is that frictions to private financial flows do not necessarily imply large effects of transitory shocks to aggregate output on private consumption in poor countries. (C) 2013 Elsevier B.V. All rights reserved.