This paper uses state-level consumption data to estimate the intertemporal elasticity of substitution of consumption (IES). In contrast to the results of Hall (1988) and Campbell and Mankiw (1989), we provide evidence indicating that the IES is significantly different from zero and probably...

This paper analyzes the dynamic impact of a joint liberalization of capital movements and of the domestic financial sector. Both a simultaneous and a sequential liberalization are examined in an overlapping-generations model with a q-theory of investment. A liberalization generally leads to an...