Consumption patterns as a measure of capital mobility: evidence from some APEC countries

Consumption patterns are used to measure capital mobility within the APEC region, both on a bilateral and multilateral basis. Two models are estimated by IV, SUR and OLS using quarterly data for four countries: the US, Japan, Canada and Australia. The results show that the hypothesis of perfect capital mobility is rejected, and some results even indicate autarky. It is argued, however, that the hypothesis of perfect capital mobility is unreasonable and that the consumption criterion is inappropriate because it assumes real interest equalization.