Research Discussion Paper – RDP 9602 Consumption and Liquidity Constraints in Australia and East Asia: Does Financial Integration Matter?

Contents

• Introduction
• The Euler Equation with Liquidity Constraints
• Estimation And Results
• Domestic and International Effects
• Implications for Welfare and Policy
• Conclusion
• Appendix A: Definitions, Sources and Figures of Data
• Appendix B: Estimation Results
• References

This paper has benefited from comments by Peter Drysdale, Luke Gower, David Gruen, Warwick McKibbin, Adrian Pagan, Heather Smith, Graeme Wells and participants at seminars at the Australian National University, the RBA and the Research Department of the International Monetary Fund. The views expressed are those of the author and should not be attributed to the Reserve Bank of Australia.