Financial innovation and Consumption in the United Kingdom

IMF Working Papers, October 1, 1990

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Financial innovation and Consumption in the United Kingdom

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Bibliographic details

• Authors: Tamim Bayoumi
• Published: October 1, 1990
• Series: IMF Working Papers

Summary

• Author: Tamim Bayoumi
• Publication date: October 1, 1990
• Series: Working Paper No. 1990/095
• Core summary: The last decade has seen widespread deregulation of domestic financial markets in the United Kingdom. This paper uses regional household data to investigate the connection between consumption and financial innovation. It is concluded that deregulation has led to a significant increase in the forward looking nature of consumption.

Research design and data

• Data: regional household data (as stated)
• Scope: investigation of the connection between consumption and financial innovation in the United Kingdom
• Methodological emphasis: analysis of consumption behavior in relation to financial deregulation and liquidity constraints (as reflected in keywords)

Key findings

• Deregulation of domestic financial markets in the United Kingdom over the preceding decade is associated with a significant increase in the forward looking nature of consumption.
• The paper links financial innovation and deregulation to changes in liquidity constraints and consumption behavior.

Subjects and keywords (as provided)

• Subjects: Asset and liability management; Consumption; Disposable income; Financial services; Income; Liquidity; National accounts; Real interest rates
• Keywords: coefficient estimate; Consumption; consumption behavior; cross-equation restriction; Disposable income; financial deregulation; Income; Liquidity; liquidity constraint; liquidity-constraint coefficient; Real interest rates; WP

Notice on interpretation

• Disclaimer (as provided): This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

IMF Working Paper — Tamim Bayoumi, "Financial innovation and Consumption in the United Kingdom", Working Paper No. 1990/095 (October 1, 1990).