The Aggregate Consumption Puzzle in Singapore

26 January, 2016

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Photo credit: Beshef

Why should we be concerned about Singapore’s falling average propensity to consume (APC)?
In their journal article “The Aggregate Consumption Puzzle in Singapore”, A/P Tilak Abeysinghe (NUS Dept. of Economics) and Keen Meng Choy address the apparent puzzle in the aggregate consumption behaviour of Singaporeans.

By the year 2003, in stark contrast to the rest of the world, Singapore’s APC plummeted to just two-fifths of the national income, leaving the Singapore economy without a dependable built-in stabiliser. This phenomenon represents a notable departure from the stable long-run equilibrium relationship between consumption, disposable income, and wealth observed elsewhere.

To learn more about the APC puzzle in Singapore, please refer to the following link: http://scholarbank.nus.edu.sg/handle/10635/19983