La consommation privée en Belgique

Bruno Eugène (bruno.eugene@nbb.be), Philippe Jeanfils (philippe.jeanfils@nbb.be) and Benoît Robert (benoit.robert@nbb.be)
Additional contact information
Bruno Eugène: National Bank of Belgium, Research Department
Philippe Jeanfils: National Bank of Belgium, Research Department
Benoît Robert: National Bank of Belgium, Research Department

No 39, Working Paper Document from National Bank of Belgium

Abstract: This paper analyses the path of private consumption and its main macroeconomic determinants. These are related to the life-cycle approach which helps explaining consumption smoothing. In that respect, it is important to go beyond the simple correlation between current disposable income and consumption to incorporate future income expectations and wealth. As for this latter, the paper also proceeds to a careful description of the mechanisms at work in the wealth effect and of the structure of Belgian households' wealth. Empirically, it is shown that in Belgium human wealth plays a far larger role than financial wealth while the interest rate reflects intertemporal substitution in explaining long-term desired consumption. Variations in these long-term determinants impact only gradually on consumption dynamics, highlighting the fact that changes need to be sustained to have sizeable effects. Finally, in addition to the interest rate, human and financial wealth, the significance of liquidity-constrained consumers and of a confidence indicator are tested. However it does not seem that they exhibit a significant contribution to consumption growth.

Keywords: branch survey; car industry; subcontracting; indirect effects (search for similar items in EconPapers)
JEL-codes: C67 J21 L22 L62 R15 R34 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2003-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:nbb:docwpp:200306-39

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