Disaggregate wealth and aggregate consumption: an investigation of empirical relationships for the G7
AbstractTo date, testing for wealth effects in consumption has mainly used aggregate wealth definitions, and/or is on a single-country basis. This study breaks new ground by analysing disaggregated wealth in consumption functions for G7 countries. Contrary to other empirical work, illiquid financial wealth, (securities, pensions and mortgage debt), tends to be a more significant long-run determinant of consumption than liquid financial wealth. We suggest that this pattern reflects a shift from liquidity constrained to life cycle behaviour following financial liberalisation. Results were robust in SURE analysis, tested in a nested manner, using varying definition of liquid assets and using non-property income instead of personal disposable income. Wald tests indicate similar long-run behaviour for all EU countries including the UK.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Institute of Economic and Social Research in its series NIESR Discussion Papers with number 180.
Date of creation: Jul 2001
Date of revision:
Contact details of provider:
Postal: 2 Dean Trench Street Smith Square London SW1P 3HE
Web page: http://www.niesr.ac.uk
Other versions of this item:
- Joseph P. Byrne & E. Philip Davis, 2003. "Disaggregate Wealth and Aggregate Consumption: an Investigation of Empirical Relationships for the G7," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(2), pages 197-220, 05.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ray Barrell & Olga Pomerantz & E.Philip Davis, 2004.
"Costs of Financial Instability, Household-Sector Balance Sheets and Consumption,"
NIESR Discussion Papers
243, National Institute of Economic and Social Research.
- Barrell, Ray & Davis, E. Philip & Pomerantz, Olga, 2006. "Costs of financial instability, household-sector balance sheets and consumption," Journal of Financial Stability, Elsevier, vol. 2(2), pages 194-216, June.
- Illing, Gerhard & Klüh, Ulrich, 2004. "Vermögenspreise und Konsum," Discussion Papers in Economics 316, University of Munich, Department of Economics.
- Christopher D. Carroll & Misuzu Otsuka & Jirka Slacalek, 2006.
"How Large Is the Housing Wealth Effect? A New Approach,"
NBER Working Papers
12746, National Bureau of Economic Research, Inc.
- Carroll, Christopher D. & Otsuka, Misuzu & Slacalek, Jirka, 2006. "How large is the housing wealth effect? A new approach," CFS Working Paper Series 2006/35, Center for Financial Studies (CFS).
- Christopher D. Carroll & Misuzu Otsuka & Jirka Slacalek, 2006. "How Large Is the Housing Wealth Effect? A New Approach," Economics Working Paper Archive 535, The Johns Hopkins University,Department of Economics.
- Michael R. Donihue & Andriy Avramenko, 2006. "Decomposing consumer wealth effects: evidence on the role of real estate assets following the wealth cycle of 1990-2002," Working Papers 06-15, Federal Reserve Bank of Boston.
- Carroll, Christopher D. & Otsuka, Misuzu & Slacalek, Jiri, 2010.
"How large are housing and financial wealth effects? A new approach,"
Working Paper Series
1283, European Central Bank.
- Christopher D. Carroll & Misuzu Otsuka & Jiri Slacalek, 2011. "How Large Are Housing and Financial Wealth Effects? A New Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(1), pages 55-79, 02.
- Mansor H. Ibrahim & Muzafar Shah Habibullah, 2010. "Stock market and aggregate consumption asymmetry: evidence from Malaysia," Studies in Economics and Finance, Emerald Group Publishing, vol. 27(1), pages 19-29, March.
- Gerhard Illing & Ulrich Klüh, 2005. "Vermögenspreise und Konsum: Neue Erkenntnisse, amerikanische Erfahrungen und europäische Herausforderungen," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(1), pages 1-22, 02.
- Aron, Janine & Muellbauer, John & Murphy, Anthony, 2006.
"Housing wealth, credit conditions and consumption,"
24485, University Library of Munich, Germany.
- Janine Aron & John Muellbauer, 2006. "Housing Wealth, Credit Conditions and Consumption," Economics Series Working Papers WPS/2006-08, University of Oxford, Department of Economics.
- Janine Aron & John Muellbauer, 2006. "Housing Wealth, Credit Conditions and Consumption," CSAE Working Paper Series 2006-08, Centre for the Study of African Economies, University of Oxford.
- Vittorio Peretti & Rangan Gupta & Roula Inglesi-Lotz, 2012. "Do House Prices Impact Consumption and Interest Rate in South Africa? Evidence from a Time-Varying Vector Autoregressive Model," Working Papers 201216, University of Pretoria, Department of Economics.
- Chauvin, V. & Damette, O., 2010. "Wealth effects: the French case," Working papers 276, Banque de France.
- Vincent Labhard & Gabriel Sterne & Chris Young, 2005. "Wealth and consumption: an assessment of the international evidence," Bank of England working papers 275, Bank of England.
- Riccardo De Bonis & Andrea Silvestrini, 2011.
"The effects of financial and real wealth on consumption: new evidence from OECD countries,"
Temi di discussione (Economic working papers)
837, Bank of Italy, Economic Research and International Relations Area.
- Riccardo De Bonis & Andrea Silvestrini, 2012. "The effects of financial and real wealth on consumption: new evidence from OECD countries," Applied Financial Economics, Taylor and Francis Journals, vol. 22(5), pages 409-425, March.
- Riccardo De Bonis & Andrea Silvestrini, 2010. "The Effects of Financial and Real Wealth on Consumption: New Evidence from OECD Countries," Mo.Fi.R. Working Papers 38, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- John N. Muellbauer, 2007.
"Housing, credit and consumer expenditure,"
Federal Reserve Bank of Kansas City, pages 267- 334.
- Jakob B Madsen & Hui Yao, 2012. "Wealth Effects In Consumption: The Financial Accelerator And Banks’ Willingness To Lend," Monash Economics Working Papers 56-12, Monash University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Communications Manager).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.