Are Aggregate Consumption Relationships Similar Across the EU?

Alan A. Carruth, Heather D. Gibson () and Euclid Tsakalotos ()

Studies in Economics from Department of Economics, University of Kent

Abstract: The answer to the question posed in the title of the paper may have some bearing on whether consumer spending will respond in similar ways to common shocks across the European Union. The DHSY model is implemented, its robustness and its commonality assessed for the 15 EU countries. The model performs encouragingly well across this group of countries, though there is evidence that the long run, unit elasticity restriction is not valid for a number of countries. Our results do not support the hypothesis of common aggregate consumption behaviour for these countries. Similar tests across four core countries, Germany, France, The Netherlands, and belgium, show greater conformity in the DHSY consumption estimates, as might be expected, but nevertheless the coefficient estimates are not similar at conventional significance levels.

Keywords: Consumer Spending; European Union; DHSY Model (search for similar items in EconPapers)
JEL-codes: E21 E32 (search for similar items in EconPapers)
Date: 1996-04
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Published in Regional Studies, 1999, 33(1), pp.17-26

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