Modeling Real Private Consumption Expenditure in Bulgaria after the Currency Board Implementation (1997-2005)

• Authors: Aleksandar Vasilev
• Languages of publication: EN

Abstracts

EN

In this paper, an econometric model of consumption in Bulgaria for the period 1997-2005 is constructed. The Error-Correction Model (ECM) approach is employed and long-run relationship between household consumption and income was found. The primary purpose of this empirical paper is to get a better understanding of the factors driving household consumption in Bulgaria and to estimate a consumption function to be used for medium-term forecasting. It is shown that all households behave in a Keynesian way, basing their consumption decisions on current income.

Keywords

EN

Keynesian consumption function; Permanent Income Hypothesis; Error Correction Model

• Publisher: Sciendo
• Journal: Zagreb International Review of Economics and Business
• Year: 2015
• Volume: 18
• Issue: 1
• Pages: 81-89

Dates

published

2015-05-01

online

2015-05-22

Contributors

author

Aleksandar Vasilev

• American University in Bulgaria, Bulgaria

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Identifiers

DOI

10.1515/zireb-2015-0005