The structure and evolution of consumption patterns

This paper investigates the relationship between economic development and macroeconomic consumption patterns using trade data and international input-output tables. We measure the similarity between a country's consumption patterns and those of G7 economies using the Kullback-Leibler divergence. We then employ panel-data regression methods to analyze changes in the relationship between income and consumption over time. Our findings indicate a positive relationship between a country's income and the similarity of its consumption patterns to G7 economies, with consumption patterns converging more rapidly than income from the 1980s until the Great Recession of 2008-2012.