This study analyses the determinants of consumption function for four
countries: China and Turkey as Upper Middle-Income Economies (UMIE);
Bangladesh and Vietnam as Lower Middle-Income Economies (LMIE). It used a model based
on the ARDL technique to analyze the time series data for the period of 1985- 2018. The results
reveal that wealth and labor income have a similar impact on consumption in UMIE and LMIE
since they affect significantly and positively aggregate consumption. Unemployment and real
interest rates have an analogous result for UMIE while assorted results LMIE. The real interest
rate harms RPAC as evidence of income effect. However, the short-term wealth and real GDP
positively affect real RPAC whereas the unemployment rate and real interest rate negatively
affect aggregate real private consumption of the selected economies.
1-Saima Liaqat Research Scholar, Department of Economics,University of Queensland, Brisbane, Australia.2-Marguerite Wotto Associate Professor,Faculty of Educational Sciences, University of Quebec at Montreal (UQAM), Canada.3-Khalid Khan Associate Professor,Department of Economics,University of Agriculture, Water and Marine
Sciences, Uthal, Balochistan.