Drivers of private consumption in the era of financialisation: new evidence for European Union countries
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10071/26672 |
Resumo: | This paper provides an empirical assessment of private consumption in the era of financialisation, using panel data for all 28 European Union countries from 1995 to 2019. According to the Post-Keynesian literature, there are two stylised facts: a fall in household labour income and an increase in both household debt and household financial and housing wealth. The two developments have opposite effects, with the former lowering private consumption and the latter increasing it. A Post-Keynesian private consumption equation is estimated by including four variables connected to those two stylised facts (household labour income, household debt, household financial wealth, and household housing wealth) and five additional control variables (lagged private consumption, short-term interest rate, long-term interest rate, inflation rate and unemployment rate). The results show that these two stylised facts have been detrimental to private consumption in the European Union countries as a whole, and more specifically in the euro area countries. The positive debt and wealth effects have not been sufficient to compensate for the negative labour income effect. The fall in household labour income has been the greatest constraint on the evolution of private consumption in the euro area countries. |
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Drivers of private consumption in the era of financialisation: new evidence for European Union countriesPrivate consumptionFinancialisationHousehold labour incomeHousehold debtHousehold financial wealthHousehold housing wealthEuropean UnionPanel dataLeast-squares dummy variable bias-corrected estimatorThis paper provides an empirical assessment of private consumption in the era of financialisation, using panel data for all 28 European Union countries from 1995 to 2019. According to the Post-Keynesian literature, there are two stylised facts: a fall in household labour income and an increase in both household debt and household financial and housing wealth. The two developments have opposite effects, with the former lowering private consumption and the latter increasing it. A Post-Keynesian private consumption equation is estimated by including four variables connected to those two stylised facts (household labour income, household debt, household financial wealth, and household housing wealth) and five additional control variables (lagged private consumption, short-term interest rate, long-term interest rate, inflation rate and unemployment rate). The results show that these two stylised facts have been detrimental to private consumption in the European Union countries as a whole, and more specifically in the euro area countries. The positive debt and wealth effects have not been sufficient to compensate for the negative labour income effect. The fall in household labour income has been the greatest constraint on the evolution of private consumption in the euro area countries.Edward Elgar2022-12-19T11:15:45Z2022-01-01T00:00:00Z20222022-12-19T11:14:48Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10071/26672eng2049-532310.4337/roke.2022.03.06Barradas, R.info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:58:45Zoai:repositorio.iscte-iul.pt:10071/26672Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:30:38.791394Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
title |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
spellingShingle |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries Barradas, R. Private consumption Financialisation Household labour income Household debt Household financial wealth Household housing wealth European Union Panel data Least-squares dummy variable bias-corrected estimator |
title_short |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
title_full |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
title_fullStr |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
title_full_unstemmed |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
title_sort |
Drivers of private consumption in the era of financialisation: new evidence for European Union countries |
author |
Barradas, R. |
author_facet |
Barradas, R. |
author_role |
author |
dc.contributor.author.fl_str_mv |
Barradas, R. |
dc.subject.por.fl_str_mv |
Private consumption Financialisation Household labour income Household debt Household financial wealth Household housing wealth European Union Panel data Least-squares dummy variable bias-corrected estimator |
topic |
Private consumption Financialisation Household labour income Household debt Household financial wealth Household housing wealth European Union Panel data Least-squares dummy variable bias-corrected estimator |
description |
This paper provides an empirical assessment of private consumption in the era of financialisation, using panel data for all 28 European Union countries from 1995 to 2019. According to the Post-Keynesian literature, there are two stylised facts: a fall in household labour income and an increase in both household debt and household financial and housing wealth. The two developments have opposite effects, with the former lowering private consumption and the latter increasing it. A Post-Keynesian private consumption equation is estimated by including four variables connected to those two stylised facts (household labour income, household debt, household financial wealth, and household housing wealth) and five additional control variables (lagged private consumption, short-term interest rate, long-term interest rate, inflation rate and unemployment rate). The results show that these two stylised facts have been detrimental to private consumption in the European Union countries as a whole, and more specifically in the euro area countries. The positive debt and wealth effects have not been sufficient to compensate for the negative labour income effect. The fall in household labour income has been the greatest constraint on the evolution of private consumption in the euro area countries. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-12-19T11:15:45Z 2022-01-01T00:00:00Z 2022 2022-12-19T11:14:48Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10071/26672 |
url |
http://hdl.handle.net/10071/26672 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
2049-5323 10.4337/roke.2022.03.06 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Edward Elgar |
publisher.none.fl_str_mv |
Edward Elgar |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799134868593967104 |