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Central banks set the nominal interest rate to target inflation and stabilize output. In monetary models, monetary policy affects output directly via the wealth effect. I show that in these models, the response of the central bank to fluctuations in output may induce real indeterminacy even if the Taylor principle is satisfied. I find that the determinacy conditions depend on the interest elasticity of output and generally, the Taylor principle is neither necessary nor sufficient for determinacy. This is in stark contrast with the New Keynesian model where a sufficiently strong policy response to inflation or output usually ensures determinacy. [ABSTRACT FROM AUTHOR]

This study examines the effect of inheritance receipt on labor supply, exploring the empirical issues associated with inheritance expectations, informal caregiving, and liquidity constraints. The literature has not examined the possibility that ignoring the labor supply increase associated with the termination of caregiving can lead to an underestimation of the decrease in labor supply after inheritance. Based on a dataset of Japanese women, we found that inheritance decreased labor supply, primarily through changes in the extensive margin, particularly for recipients in their 50s and under 40 years of age with children. Unlike labor supply, household expenditures hardly change after an inheritance. Furthermore, unanticipated inheritances reduce labor supply compared to anticipated inheritances. Additionally, controlling for the termination of caregiving responsibilities resulted in a 25 % larger estimate of the wealth effect of inheritance receipt on labor supply. Finally, pre-inheritance liquidity constraints have no effect on changes in labor supply. [ABSTRACT FROM AUTHOR]

The housing price affects the allocation of family budget on consumption. We use regression analysis to confirm whether Taiwan's housing prices have a significant influence on household consumption based on the questionnaire survey on household income and expenditure in 2018. We find that housing prices have the greatest impact on household consumption, possibly because housing accounts for the largest proportion of household assets, implying a significant wealth effect. In addition, the impact of interest of deposit on consumption is also found to be greater than that of household income as it is related to the level of total assets. The housing prices for single-person household with female gender have a negative and significant impact on household consumption. Finally, housing prices are found to have a significantly negative effect on non-consumption and current transfer expenditure. The possible reason is that the households who hold the house believe that the appreciation of housing price can provide more protection for the family from suffering from possible economic risks in the future and thus crowd out non-consumption expenditures. [ABSTRACT FROM AUTHOR]

Despite the role of wealth in modeling the propensity to consume luxurious goods and services, the literature has so far neglected the role of wealth as inferred from the stock market in modeling tourism inflow. Using 43 European countries over the period 1994???2019, we demonstrate that demand-side wealth effect as inferred from the Morgan Stanley Capital International (MSCI) indexes is an important determinant of inbound tourism. We find that a good financial mood extrapolated from the bullish wealth effect positively influences the inflow of tourists to Europe. The effect of the relationship between external wealth effect and inbound tourism is higher for non-EU member countries and countries in Eastern Europe. Lastly, we find that the wealth effect in the US was an important factor in predicting inbound tourism during the global financial crisis. [ABSTRACT FROM AUTHOR]

Copyright of Financial Research Journal (FRJ) is the property of University of Tehran, Faculty of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Carbon emissions generated by household activities are an important factor in climate change; reducing household carbon emissions (HCEs) will be an essential part of future energy conservation and sustainability initiatives. Housing prices have a crucial impact on residents’ consumption, and the increase of consumption level is the main reason for the rise of household carbon emissions. Therefore, studying the impact of housing prices on HCEs not only provides guidance on expanding domestic demand and increasing consumption from the perspective of housing prices but also provides construction advice on curbing global warming and is more conducive to the development of building sustainable consumption. Taking household consumption as a starting point, this study investigates the impact of house prices on HCE in China based on the 2018 Chinese Household Tracking Survey (CFPS) and the China Energy Statistics Yearbook, using the carbon emission factor method to measure carbon emissions. It was found that increased house prices had a significant positive effect on HCEs. There is a clear wealth effect of rising house prices among homeowners, while the substitution effect also increases consumption among non-homeowners (by reducing attempts to save). Furthermore, rising house prices have a varied effect on different types of HCEs. The impact on emissions from everyday necessities such as clothing and housing is greater, and the impact on entertainment-related carbon emissions is small. In addition, rising house prices had the strongest effect on HCEs in central China. Homeowners in the east responded more to increased house prices than in the west, while the inverse effect was observed among non-homeowners. Urban homeowners and rural non-homeowners were also more sensitive to rising house prices. Policy recommendations are made based on the findings.

This article critically evaluates debates over the causes of U.S. inflation. We first show that claims that the Biden stimulus was the major cause of inflation are mistaken: the key data series—stimulus spending and inflation—move dramatically out of phase. While the first ebbs quickly, the second persistently surges. We then look at alternative explanations for the price rises. We assess four supply-side factors: imports, energy prices, rises in corporate profit margins, and COVID. We argue that discussions of COVID's impact have thus far only tangentially acknowledged the pandemic's far-reaching effects on labor markets. We conclude that while all four factors played roles in bringing on and sustaining inflation, they cannot explain all of it. There is an aggregate demand problem. But the surprise surge in demand did not arise from government spending. It came from the unprecedented gains in household wealth, particularly for the richest 10% of households, which we show powered the recovery of aggregate US consumption expenditure, especially from July 2021. The final cause of the inflationary surge in the U.S., therefore, was in large measure the unequal (wealth) effects of ultra-loose monetary policy during 2020–2021. This conclusion is important because supply-side (and thus potentially inflationary) pressures are unlikely to subside soon. Going forward, COVID, war, climate change, and the drift to a belligerently multipolar world system are all likely to keep straining global supply chains. Our conclusion outlines how policy has to change to deal with a world of steady, but irregular supply shocks, including Covid's continuing impact on labor markets. By their nature, such shocks create problems that monetary policy can cope with only at an enormous cost; they require targeted solutions. But when supply plummets or becomes more variable, fiscal policy also has to adapt: existing explorations of ways to steady demand over the business cycle have to embrace much bolder macroeconomic measures to control over-spending when supply is temporarily constrained. [ABSTRACT FROM AUTHOR]

Using CHFS data and quantile regression method, this study empirically analyzes the impact of current homestead housing on rural household financial asset allocation in China. The main findings are as followings: The homestead housing system effectively protects the residential rights and interests of rural residents, but it is constrained by the system and fails to give full play to the investment value; Only on the premise of meeting the needs of family mobility, homestead housing can effectively play the wealth effect; In the family risk portfolio, homestead housing and risk financial asset allocation are mutually exclusive; In private lending, the impact of homestead housing on the provision of loans is more complex, but not always statistically significant; The impact of homestead housing on family financial asset allocation shows obvious heterogeneity and differentiation. Further releasing the liquidity of homestead housing, enriching the level of rural financial products and services, and encouraging rural families to appropriately participate in venture financial asset investment are the reform direction to improve the welfare level of rural families and optimize the allocation of family assets. [ABSTRACT FROM AUTHOR]

Class forces founded in production relations are basic agents of continuity and change in all societies today. The main distinction is between those who own means of production and those they hire to produce goods and services, along with others they hire to coordinate and control the producers. Of course, these class differences interact with relations based on race, gender, age and other specific conditions. But those analysts who choose to focus on these factors while either ignoring class relations or reducing them to cultural distinctions are missing the underlying profitdriven dynamic of advanced capitalism. The aim of this paper is to identify the basic classes producing goods and services in advanced capitalism and assess their disposition to progressive change. If we want to move toward a sustainable equitable future, we need to 'find the horses' to get us there. Are non-managerial professional employees' likely candidates? [ABSTRACT FROM AUTHOR]

We use data from the Health and Retirement Study (HRS) to examine how labour supply changes around divorces that occur later in life. We find that the probability of work and hours worked increase for women, but decline for men, with evidence of an anticipation effect for men. We find weak evidence of a post-divorce decline in per-capita wealth and stronger evidence of a decline in per-capita non-own-wage income for women, but not for men. While not causal, these findings are consistent with income and possibly wealth effects driving the post-divorce increase in women's labour supply. [ABSTRACT FROM AUTHOR]

The aim of this paper is to outline the relationship between income and assets when taking into account selected models of farms' functioning. The following farm models are examined: traditional, industrial, sustainable, and organic. Panel models were used that were based on the results of individual unpublished data for farms in Poland that undertook agricultural accounting according to the Farm Accounting Data Network (FADN) principles from 2004 to 2019. It was found that industrial farms had the clearest income-assets relationship, while traditional farms had the least clear relationship. The value of land, as a component of assets, was found to weaken the income-assets relationship. In consequence, the value of assets increased faster than income. Thus, the farmers are becoming wealthier in terms of the value of their assets, but this is not reflected in their income.

High housing prices and the urban–rural income gap are two important social problems that China is facing currently. Due to the imbalance of regional economic development, the relationship between housing prices and urban–rural income gap in regions may also be different. This study examines this relationship across regions in China by employing the bootstrap panel Granger causality method. We find that regional differences obviously exist between the housing prices and the urban–rural income gap. Housing prices have widened the urban–rural income gap in the eastern region, have narrowed it in the northeastern region, and have no significant impacts in the central and western regions. On the other hand, the urban–rural income gap is an important driver of the increasing housing prices in the eastern region, has suppressed them in the central and northeastern regions, and has no significant influence in the western region. The government may curb the excessive growth in housing prices to avoid widening the urban–rural income gap in the eastern region. For the northeastern region, boosting the housing market may help to narrow the income gap. For the central and western regions, policies should be committed to raising the resident income to reduce the income gap. These can provide references for policy-making. [ABSTRACT FROM AUTHOR]

This study employs housing data from the nine main regions of England and from overall England to compare the volatility risks of housing prices for the first-time buyer (FTB) and former owner-occupier (FOO) markets. This study collects data from February 2012 to March 2020 to assess the volatility characteristics of housing prices in these two markets in each region of England. Additionally, the effect of interest rate shocks and the wealth effect of the stock market on these two markets are observed. The results reveal that for most regions, the FTB market has higher housing price volatility risks compared with the FOO market. Additionally, the FTB market is more easily affected by interest rate shocks and the wealth effect. In contrast to FOOs, FTBs are generally younger and less wealthy. If FTBs are facing a market with higher housing price risk, especially when the overall economy is affected by a shock (such as the European Debt Crisis or the COVID-19 pandemic), the response of the FTB housing market is greater; then the government must pay special attention when implementing policies that interfere with the market since these policies would particularly affect the welfare of FTBs. [ABSTRACT FROM AUTHOR]

The aim of the article is to initially identify the characteristics of farms in which the wealth effect appears and recognize the extent of this effect in market farms in the Wielkopolska Region. This was realized based on the results of 120 questionnaire surveys of farms in the Wielkopolska Region. The research shows that there is a group of farms in which the wealth effect takes place (9.2% in the surveyed group). This mainly applies to units specializing in field crops. Farms in which the potential wealth effect appears are characterized by a larger area of arable land but, on the other hand, by a lower income, value of assets and output. In addition to the risks associated with this effect, there are also positive aspects relating to an increased economic activity of farms or an increase in the possibility of credit guarantees. In the context of research results, it would be advisable, in the future, to increase the degressivity of area payments under the CAP due to their lower impact of payments on the capitalization of subsidies and, thus, the intrinsic increase in asset value in farms.

This research mainly explores the significance of tourism expenditure and wealth effect, and the relationship between tourism expenditure and age. Discuss that the increase in the overall wealth effect will increase spending on tourism for aging. This study uses the Quantile Regression model to analyze tourism expenditure behaviour. The empirical results found that in areas with lower average personal income, more agricultural workers may have a higher ratio of business assets allocating average total assets. Still, they are critical areas for tourism expenditure. Regarding the relationship between age and tourism expenditure, quantile expenditure has an inconsistent relationship with age, mid-to-high quantile expenditure has a positive relationship with age. In terms of high quantile expenditure, people over the age of 50 are the groups that spend more. [ABSTRACT FROM AUTHOR]

Education is fundamental to enhancing the quality of life and ensuring social and economic progress. However, the divisive economic structure separating urban and rural areas in China led to insufficient educational investment in rural China, and trapped farmers' children in the agricultural sector. Land is one major asset of rural households, and can generate income or be mortgaged for credit used for educational investment. This study explored the relationship between land endowment and parental educational investment of rural households, from both theoretical and empirical perspectives, breaking down the effect of land endowment into two different components for the better promotion of educational investment. Based on data from a 2018 survey in Jiangxi Province, where rural education investment is severely restricted by the level of economic development, this study shows that the income and wealth effects of land endowment exists, and both increase the probability of educational investment. The wealth effect dominates the income effect when the households managed large-scale land or owned more land with contract rights. However, when the land endowment was less than a threshold of 3.85 mu, the wealth effect was replaced by the substitution effect, which conversely restrained educational investment for small-scale farmers in rural China. These findings highlight the importance of large-scale farmland as a mortgageable, or income-generating, asset in stimulating educational investment. Therefore, China should continue adhering to reform through the market-oriented land transfer system, with the government actively playing a role in ensuring the stability of land transfer and the security of land management rights, and increasing productivity for a high agricultural income to achieve sustainable educational investment. [ABSTRACT FROM AUTHOR]

This study investigates the long-term impact of access to welfare housing ownership on household consumption using data from the China Family Panel Studies (2010 to 2018). Our results show that households that owned welfare housing had a higher level of consumption than those without access to such housing, even after controlling for the housing wealth effect. This positive impact on consumption was particularly significant for low-consumption households. We found that welfare housing ownership increased consumption through reducing household debts, enhancing consumer confidence, and facilitating further accumulation of assets. [ABSTRACT FROM AUTHOR]

The aim of this paper is to outline the relationship between income and assets when taking into account selected models of farms' functioning. The following farm models are examined: traditional, industrial, sustainable, and organic. Panel models were used that were based on the results of individual unpublished data for farms in Poland that undertook agricultural accounting according to the Farm Accounting Data Network (FADN) principles from 2004 to 2019. It was found that industrial farms had the clearest income-assets relationship, while traditional farms had the least clear relationship. The value of land, as a component of assets, was found to weaken the income-assets relationship. In consequence, the value of assets increased faster than income. Thus, the farmers are becoming wealthier in terms of the value of their assets, but this is not reflected in their income. [ABSTRACT FROM AUTHOR]

While there has been a copious emphasis on wealth effects in macroeconomic analysis in advanced economies, it has remained an underexplored subject for developing economies. This paper specifically examines the existence of stock and housing wealth effects in developing countries. Further, it examines the related question of how differently the consumption responds to changes in a specific type of wealth, and to what extent the degree of financial deepening alters the intensity of wealth effect. Empirical inquiry, using panel data of 20 large emerging market and developing countries over the period 1996:Q1 to 2019:Q4, reveals a strong housing wealth effect, which could be attributed to dispersed ownership and households' belief in the durability of wealth gains. In contrast, there is a lack of ample evidence of any significant positive stock market wealth effect, rather we find the presence of a somewhat small negative stock wealth effect, which could be associated with skewed holdings of stock wealth and uncertainty in wealth gains. However, finding from the sample of countries characterized by a higher degree of financial deepening, reveals that the stock market wealth effect turns positive and significant when the financial sector crosses a threshold of development. Besides, the housing wealth effect turns stronger with greater financial deepening and dominates the stock market wealth effect. Thus, as developing countries attain higher financial development, the wealth effect channel may turn prominent in influencing business cycle behaviour, macroeconomic aggregates and policy responses. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the relationship between various forms of income/wealth and tourism departures in selected European Union (EU) countries. Design – The design of this study is based on analysing quarterly data on incomes, house prices, net financial assets, financial derivatives and employee stock options in order to measure the link between wealth and tourism departures in selected countries—Austria, Belgium, Germany, Denmark, Spain, France, Ireland, Italy, Sweden, Slovenia and the United Kingdom (UK)—with individual-country time series that span the period from 2000 to 2018. Methodology – Granger causality in the relationship between income and wealth inputs and tourism departures has been examined using the autoregressive distributed lag model (ARDL), the bounds test for cointegration, the vector error correction model (VECM), and long- and short-term (as well as joint) causality. Findings – The findings showed the existence of cointegration and a direct effect on the relationship between various sources of wealth/income and tourism departures in both the longand short-run, and jointly, only in the case of Austria. House price, net financial asset and stock option causality results essentially showed unidirectional causality that runs from that form of wealth to tourism departures in the case of Belgium, Germany, Spain, France, Slovenia and the UK, thus providing extensive support for the wealth effect–tourism link in certain countries. Originality of the research – The originality of this paper stems from the fact that it offers the first analysis of the relationship between various forms of income/wealth and tourism departures in selected European Union (EU) countries. The findings of this study suggest that a bounds test for cointegration due to data constraints should be taken into account when examining the link between the wealth effect and tourism in country time series analysis.

We study the response of non-housing consumption to housing price movements in urban China, which has been witnessing a real estate boom ever since 2003. Using Urban Household Survey data, we estimate an elasticity of consumption with respect to housing price of 0.06–0.07 for homeowners. Moreover, we find that the average marginal propensity to consume out of housing wealth is 0.025–0.03. We employ a novel instrumental variable associated with higher-education expansion to ensure that these estimates are causal effects. As for renters, we show that their consumption response to housing shocks is insignificant. We further reveal that the marginal propensity to consume is larger for homeowners who are more credit constrained. [ABSTRACT FROM AUTHOR]

Copyright of Annals of the Polish Association of Agricultural & Agribusiness Economists is the property of Polish Association of Agricultural & Agribusiness Economists and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Rising uncertainty has drawn researchers' attention towards households' anti-risk capacities. Using data from the China Household Finance Survey covering 2019 to 2021, this study investigates the impact of financial literacy on household financial resilience. We measure household financial resilience by analyzing inter-period variations in liquid assets pre- and post-Covid-19, coupled with constructing a sensitivity index. Our analysis indicates that financial literacy significantly enhances financial resilience through the wealth effect and risk mitigation effect. This study highlights the critical role of financial literacy in mitigating risks and accelerating recovery from financial disturbances. • We measure financial resilience by a sensitivity index of the variation of liquidity. • Financial literacy has significantly improved financial resilience. • Financial literacy is significant in resisting risks and accelerating recovery from financial disturbances. [ABSTRACT FROM AUTHOR]

Copyright of Economic Science / Jingji Kexue is the property of Economic Science Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper investigates whether the European Union policies to tackle climate change create or destroy value for shareholders over the years 2013–2018. Using the event study method, our results suggest that all the sectors were affected by at least one climate policy announcement and that negative effects were more common than positive effects, especially when the Paris Agreement came into force. Up until that point, the announcement of a new policy produced significant positive effects only on the most environmentally committed firms. Finally, data panel regressions reveal that the company's sector, more than its environmental commitment, played a central role in determining market reactions toward climate policies. Our paper contributes to the still limited debate on the relationship between environmental regulation and value for equity investors and opens up the debate on a topic yet to be explored: the mitigating role of the company's environmental commitment. Relevant implications for policy makers promoting a European sustainable economy are also discussed. [ABSTRACT FROM AUTHOR]

Despite the rapid development of the Chinese stock market in recent years, relatively little is known about its characteristics or its relationship to other macroeconomic variables. For example, in contrast to more developed markets, dependencies between stock market movements and consumer expenditure are less documented for China. In this paper, I first show that the Shanghai Stock Exchange (SSE, 1999--2010) has higher average returns and variability than the Standard and Poor's 500 Index (S&P 500). The General Autoregressive Conditional Heteroscedasticity (GARCH) model also shows that the SSE has high volatility clustering. Then, I examine the statistical relationships between consumer expenditure and the behavior of the SSE against theoretical predictions. Following the stock market "wealth effect," one would expect higher (lower) stock returns would lead to higher (lower) consumer expenditure. The uncertainty hypothesis predicts that high volatility in the stock market will create higher uncertainty in consumption spending. However, my analyses using the Vector Auto-Regression (VAR) model show that private consumption expenditure in both rural and urban areas had no relationship with and was not aected by the market returns. Analyses also show that the volatility of the Shanghai Stock Exchange had a small lagged eect on urban private consumption expenditure. Results suggest that the Chinese stock market is relatively immature with higher volatility. At this stage, stock markets in China are still inefficient and do not serve as good leading indicators of future economic activities for Chinese consumers.

The purpose of this paper is to examine the wealth effect of the Check Clearing for the 21st Century Act, also known as Check 21, on bank stock return. We use event study analysis on thirty-four U.S. bank stocks listed on the New York Stock Exchange. Our analysis reveals that Check 21 is associated with positive abnormal return. Overall, our results suggest that investors are optimistic about the future performance of U.S. banks with the introduction of Check 21.

This study examines the impact of housing price on the divorce rate in South Korea using a fixed effects model and dynamic panel data. There is currently a lack of consensus in the literature regarding the effect of house price on divorce. We simultaneously consider both house price and rental cost to distinguish a positive and negative effect of housing price. Using a cross-regional dataset of 15 provinces in South Korea from 1990 to 2013, we show that the wealth effect of house price changes on divorce rates is different from the effect of rental cost. All regression results indicate positive and statistically significant wealth effects of house price, but negative effects of the rental price changes on divorce rates. [ABSTRACT FROM AUTHOR]

Households make their decisions regarding their consumption expenditures by considering not only their current income but also their wealth. This relationship is termed as the wealth effect in the economic literature. Theoretically, the change in household wealth affects their consumption expenditures. In this context, it can be stated that the existence of the wealth effect will have important effects on the economy. On the other hand, the Turkish economy has experienced significant fluctuations in the prices of housing and financial assets in recent years. The 2008 financial crisis revealed the importance of the stimulating effect of housing prices on total demand. However, empirical evidence shows that the impact of increase and decrease in wealth on consumption is not the same. Accordingly, the study aims to empirically investigate the asymmetrical effects of the change in housing and financial wealth on consumption expenditures. In the study, we estimated two empirical models. Firstly, we investigated the effect of housing wealth on consumption. In the other model, we examined the impact of financial wealth on consumption. The empirical method of the study is NARDL. The analyses include between the 2011:Q1-2019:Q4 periods. The empirical results indicate that there is asymmetric cointegration relationship between wealth and consumption. In the long term, the increase in housing wealth has no effect on consumption. However, a 1% reduction in housing wealth lowers consumption by 0.32%. The impact of the financial wealth on consumption occurs in both an increase and a decrease in financial wealth. While a 1% increase in financial wealth raises consumption by 0.18%, a 1% decrease in financial wealth reduces consumption by 0.21%. When the empirical results are evaluated together, it can be stated that the wealth effect is valid in the analysis period. [ABSTRACT FROM AUTHOR]

This study uses the Markov switching vector autoregressive model (MSVAR) model to examine dynamic relationships between stock and housing market returns in the United States covering the period from 1987 to 2017. The results show significant regime-dependent auto-correlations in stock and housing returns in both the high volatility and low volatility regimes studied. The feedback effects are stronger in the housing market than the stock market. We observe significant positive cross-market spillovers, consistent with the wealth story. Increases in stock returns in low volatility regimes create positive spillover effects into housing markets; likewise, positive spillovers in the reverse direction from housing market to stock market occur in high volatility regimes. We also find significant negative correlations between lagged stock returns and current housing returns in the high volatility regime, which implies that capital switching occurs as investors move their investments out of the stock market and into the housing market. In this manner, the housing market becomes a hedge against a volatile stock market. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the relationship between various forms of income/wealth and tourism departures in selected European Union (EU) countries. Design – The design of this study is based on analysing quarterly data on incomes, house prices, net financial assets, financial derivatives and employee stock options in order to measure the link between wealth and tourism departures in selected countries—Austria, Belgium, Germany, Denmark, Spain, France, Ireland, Italy, Sweden, Slovenia and the United Kingdom (UK)—with individual-country time series that span the period from 2000 to 2018. Methodology – Granger causality in the relationship between income and wealth inputs and tourism departures has been examined using the autoregressive distributed lag model (ARDL), the bounds test for cointegration, the vector error correction model (VECM), and long- and short-term (as well as joint) causality. Findings – The findings showed the existence of cointegration and a direct effect on the relationship between various sources of wealth/income and tourism departures in both the long- and short-run, and jointly, only in the case of Austria. House price, net financial asset and stock option causality results essentially showed unidirectional causality that runs from that form of wealth to tourism departures in the case of Belgium, Germany, Spain, France, Slovenia and the UK, thus providing extensive support for the wealth effect–tourism link in certain countries. Originality of the research – The originality of this paper stems from the fact that it offers the first analysis of the relationship between various forms of income/wealth and tourism departures in selected European Union (EU) countries. The findings of this study suggest that a bounds test for cointegration due to data constraints should be taken into account when examining the link between the wealth effect and tourism in country time series analysis. [ABSTRACT FROM AUTHOR]

This study investigates the stability of money demand function for China, using an innovation ARDL framework for co-integration test for the time period 1986-2018. Specifically, this study used narrow money (M1) and broad money (M2) as a measurement of money. To consider currency wealth and substitution effects, the estimated money demand model includes the real effective exchange rate in addition to income and interest rate. By incorporating the CUSUM and CUSUMSQ tests for stability in conjunction with co-integration analysis, the results confirm that there exists a stable long-run relationship for narrow money demand function. Importantly, the finding also discovers that real effective exchange rate appears to have a significant substitution effect on narrow money demand, which its omission can lead to biased result and misspecifications in the money demand function. This further corroborates that narrow money, (M1) act as a better measurement, which may have systematic influence on the trend of monetary aggregates. [ABSTRACT FROM AUTHOR]

We experimentally investigate the effects of conflict budget on conflict intensity. We run a between-subjects Tullock contest in which we vary the contest budget from Low to Medium to High, while keeping the risk-neutral Nash equilibrium bid the same. We find a non-monotonic relationship: bids increase when the budget increases from Low to Medium, but decrease when the budget further increases from Medium to High. This can happen for players with concave utility, if a high budget has a wealth effect that reduces the marginal utility of winning resulting in lower bids. To test this, we run a Wealth treatment in which the budget remains the Medium, but contestants receive a fixed payment (as wealth) independent of the contest outcome. The bids in the Wealth treatment are lower than the Medium treatment, but are not different from the High treatment, supporting the hypothesis of a wealth effect. We then support this empirical observation by a theoretical model with risk-aversion. [ABSTRACT FROM AUTHOR]

We estimate a micro-founded life-cycle consumption model for Saudi Arabia over the period 1970–2017 using error correction model procedures. Dynamic adjustments are significant, and both income and wealth are found to have significant effects, with a long-run marginal propensity to consume out of the income of 0.95 and out of the wealth of 0.06. The sensitivity of consumption to income and wealth, as well as the estimated short-term effects of price and real interest rate, are consistent with the rapidly growing Saudi economy. By capturing the key determinants of the life-cycle model, our approach is useful for the design of macroeconomic policy. We estimate the impact of the recent VAT reform. [ABSTRACT FROM AUTHOR]

We provide two extensions of Gilboa and Schmeidler (J Math Econ 18:141–153, 1989)'s maxmin expected utility decision rule to accommodate a decision maker's changing ambiguity attitudes. The two rules are, respectively, a weighted maxmin rule and a variant constraint rule. The former evaluates an act by a weighted average of its worst and best possible expected utilities over a set of priors, with the weights depending on the act. The latter evaluates an act by its worst expected utility over a neighborhood of a set of approximating priors, with the size of the neighborhood depending on the act. Canonical representations of the two rules are provided for classes of preference relations that exhibit, respectively, ambiguity aversion à la Schmeidler (Econometrica 57:571–587, 1989) and ambiguity aversion à la Ghirardato and Marinacci (J Econ Theory 102:251–289, 2002). In the second part of this paper, we study wealth effect under ambiguity. We propose axioms on absolute and relative ambiguity aversion and derive three representations for the ambiguity averse preference relations exhibiting decreasing (increasing) absolute ambiguity aversion. In particular, decreasing absolute ambiguity aversion implies that as the baseline utility of an act increases, a weighted maxmin decision maker puts less weight on the worst case, and a variant constraint decision maker considers a smaller neighborhood of approximating priors. [ABSTRACT FROM AUTHOR]