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Wealth Effects in the CEE Emerging Economies: A Long-Run Panel Approach

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  • Burdet Florina

    (Babeș-Bolyai University, Romania)

Abstract

This paper explores the relationship between actual individual consumption, housing wealth, and stock wealth in a panel of emerging European Union economies. Using the pooled mean group estimator (PMG) and a crisis dummy variable, the analysis captures the effects of the 2008–2010 financial crisis. Results indicate that both housing and stock wealth positively influence consumption, with housing wealth having a slightly stronger impact. Consumption is also sensitive to long-term changes in the income from wages and salaries. Particularly during the crisis, when real estate market downturns significantly affected households in Central and Eastern Europe (CEE), the effect of changes in asset prices raised in magnitude. The findings offer important policy implications for managing asset price effects on household consumption, particularly in emerging markets.

Suggested Citation

  • Burdet Florina, 2025. "Wealth Effects in the CEE Emerging Economies: A Long-Run Panel Approach," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 70(1), pages 112-125.
    • Handle: RePEc:vrs:subboe:v:70:y:2025:i:1:p:112-125:n:1006
    DOI: 10.2478/subboec-2025-0006
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    References listed on IDEAS

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    4. Peltonen, Tuomas A. & Sousa, Ricardo M. & Vansteenkiste, Isabel S., 2012. "Wealth effects in emerging market economies," International Review of Economics & Finance, Elsevier, vol. 24(C), pages 155-166.
    5. Ahec Šonje, Amina & Čeh Časni, Anita & Vizek, Maruška, 2014. "The effect of housing and stock market wealth on consumption in emerging and developed countries," Economic Systems, Elsevier, vol. 38(3), pages 433-450.
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    More about this item

    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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