Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228221
Authors: 
de Bondt, Gabe
Gieseck, Arne
Herrero, Pablo
Zekaite, Zivile
Year of Publication: 
2019
Series/Report no.: 
ECB Working Paper No. 2343
Abstract: 
This study extends a thick modelling tool for aggregated euro area real private consumption of de Bondt et al. (2019) to the four largest euro area countries. The suite of error correction models performs well in and out of sample. The ranges and averages of estimated elasticities are, however, sensitive to the exact model specification. We also show that decomposing disposable income into labour, property and transfer income is essential for understanding and forecasting consumption. Finally, substantial crosscountry heterogeneity in marginal propensities to consume out of income and wealth components calls for caution when interpreting aggregate euro area developments.
Subjects: 
private consumption
income
wealth
thick modelling
JEL: 
C53
D12
E21
E27
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3974-4
Document Type: 
Working Paper

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