Residential and stock market effects on consumption across Europe

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Détails sur la publication

Liste des auteurs: Pacheco, L.M., & Barata, J.M.
Editeur: Taylor & Francis (Routledge): SSH Titles
Année de publication: 2005
Numéro du volume: 5
Numéro de publication: 3
Page d'accueil: 255
Dernière page: 278
Nombre de pages: 24
ISSN: 1461-6718
Languages: Anglais-Royaume-Uni (EN-GB)


Résumé

The aim of this paper is to explain private consumption as a function of
income and wealth with data from European Union countries. To examine
how the developments in housing and stock markets may have affected
consumption behaviour, we adopt two econometric procedures. First, we
use the Stock-Watson procedure to account for wealth effects on
consumption over the long run. Second, through an error-correction model
we measure wealth effects on consumption over the short run. We found
significant albeit mixed values for the long-run elasticities of
consumption with respect to real residential and equity prices. We also
found strong evidence that consumption exhibits error-correction
behaviour in the short run, with the value of the error-correction term
signifying that household consumption takes several quarters to
completely respond to changes in the markets. © 2005 Taylor &
Francis.


Mots-clés

Economics, Management


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