In: Ekonomický časopis/Journal of Economics, vol. 66, no. 10
The Long-run Determinants of Consumption in the Euro Area: Is there a Role for Uncertainty?
Year, pages: 2018, 969 - 986
Keywords: consumption, disposable income, wealth, uncertainty, euro area; JEL Classification: C51, E20, E21, E24
Article type: Vedecký
Document type: PDF
This paper examines the long-run (cointegrating) relationship between real consumption, real disposable income, real net financial wealth, real housing wealth, and uncertainties in future income (income uncertainty) and the rate of return on accumulated financial wealth (capital uncertainty) for a panel of 12 euro area countries. Using proxies for the unobservable housing wealth and income and capital uncertainty, we show that such a relationship does exist, but it is not homogenous for the euro area as a whole. Real disposable income and real net financial wealth are the main determinants of real consumption for the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) and non-PIIGS (Austria, Belgium, Finland, France, Germany, Netherlands, and Slovenia) euro areas. Income and capital uncertainties are negatively associated with real consumption, but only in the PIIGS euro area.
How to cite:
Dajcman, S. 2018. The Long-run Determinants of Consumption in the Euro Area: Is there a Role for Uncertainty?. In Ekonomický časopis/Journal of Economics, vol. 66, no.10, pp. 969-986. ISSN 0013-3035.
Dajcman, S. (2018). The Long-run Determinants of Consumption in the Euro Area: Is there a Role for Uncertainty?. Ekonomický časopis/Journal of Economics, 66(10), 969-986. ISSN 0013-3035.
Publisher: Ekonomický ústav SAV a Prognostický ústav CSPV SAV
Published: 6. 11. 2018