Narrow Results

The recent Malaysian attempt to introduce the Goods and Services Tax (GST) was thwarted by public concerns about: (i) its impact on the price level; (ii) its regressivity; (iii) the possibility of the rate increases once the tax is in place; and finally, the disincentive large revenues from the GST would be in addressing the underlying causes of wasteful public expenditures and leakages. The experiences of countries that have implemented a similar tax are surveyed to assess these concerns. It is concluded that within the Malaysian context, all the concerns are well-founded and measures are therefore suggested to ameliorate them.

Disaster research has been concerned with the role of adverse environmental conditions vis-à-vis adverse social conditions in determining food access during catastrophes. This paper investigates the issue, and presents household-data from flood-devastated Bangladesh to argue that, while hunger is clearly associated with exposure to disaster conditions, prior deficits in resources (given the education, occupation and ownership of productive assets of household-members) are more significant in determining the risk of consumption failure during catastrophes. The paper finds that, the risk-generating factors are often interrelated, but, their relative contributions vary across households having varying locations of natural hazards and in consumption distribution.

Global debt will keep growth subdued over the next decade. Falling work force will move labor intensive manufacturing out of China and into South Asia. Investment, not consumption, will be the main driver of growth, which primarily will take place in Asia and probably also Africa. New institutional frameworks such as AIIB emerge, but they will operate inside the existing global order. Falling albeit still tangible Chinese saving combined with fading interest for US treasury bonds will pose an awkward dilemma for US monetary policy. Under such circumstances current savings–investment balances will continue to rule the global economy.

The objective of this paper is to investigate the impacts of urbanization on influencing the rural–urban consumption disparity in China, a research gap which has not been bridged so far. Adopting a provincial dataset from 1997 to 2014, a generalized method of moments (GMM) estimator is employed to reveal the impact of urbanization on the ratio of per capita consumption expenditure of the urban households to the rural households, along with other socioeconomic variables. Empirical results show salient relationship between increasing urbanization ratio and declining rural–urban inequality. Significant impact of education costs on increasing the rural–urban inequality is also observed. Other factors that increase the disparity include foreign investment and gross regional product (GRP) indices. Industrial structure, costs of housing and health care are insignificant factors. The results of this study help in understanding China’s new urbanization development strategy in a better way.

Since 2010, China’s miraculous growth has come to a halt and has shown steady deceleration. To re-accelerate economic growth, stimulating domestic consumption is a crucial way with fighting poverty as the key step. This paper attempts to explore the impact of poverty on resident consumption in China over the last four decades. Based on provincial data, we first simulate income distribution at the individual level and provide moderate poverty profiles at the provincial level. The empirical analyses are then conducted to gauge the poverty impacts using the estimated poverty index. Results show that (1) moderate poverty has decreased sharply in China, with the best achievement in Beijing, Shanghai and Guangdong; (2) moderate poverty exerts a significantly negative impact on resident consumption; and (3) when poverty increases, resident consumption on household equipment decreases the most, while resident consumption on food, transportation, and telecommunication decreases the least.

This paper develops a three-country model that incorporates international relocation of firms and explores the macroeconomic effects of deregulation in the services sector by each country. A novel feature of our model is that the international relocation of firms responds to exchange rate movements caused by deregulation shocks in the services sector. From this analysis, it is found that a deregulation shock in a country always benefits the country in spite of the outflows of firms, while it can be detrimental to other two countries, in terms of relative consumption levels.

The lack of comprehensive empirical narratives about the effects of income and price differentials, as well as possible distributional asymmetries on consumption in G7 countries, compelled this study by using both ARDL and Quantile ARDL models. NARDL results indicate that positive shocks in income have significant and positive effects on consumption in all countries. Moreover, evidence from the Quantile ARDL model indicates that positive and significant impacts were momentary except at the 95th quantile of consumption distributions in Canada. Furthermore, price variations negatively affected consumption in all G7 countries and across all distributions, with evidence of panic buying in Italy, the US and at the 5th quantile in Japan. Meanwhile, there is evidence of asymmetric effects from income and price variations on consumption in all G7 countries, whereas the influence of income variations on consumption is heterogeneous in Canada. Moreover, the asymmetric effects of price differentials were consistent across all the distributions in all the countries. Overall, to ensure consumption optimization and by extension, economic growth, differentiated policies to respond to income and price variations at all times are of the essence.