Consumption per effective labour in Brazil: testing for the optimising behaviour

Ricardo Ramalhete Moreira

International Journal of Computational Economics and Econometrics, 2023, vol. 13, issue 1, 23-34

Abstract: We contributed to the literature on household consumption in specific ways: firstly, we adopted a long-run cointegration analysis instead of a first-difference one, which was conventional in previous works; second, by building on monthly data, we enlarged the number of observations of our sample, thus overcoming a common problem of low-frequency data in studies based on quarterly or annual time series. We thus confirmed the hypothesis of an optimising behaviour in consumption for the Brazilian economy, although jointly with a relevant role of income. We also inferred the effect of risk aversion in lowering the optimality of consumption after the Subprime crisis period, based on a Markov-switching approach.

Keywords: consumption; households; interest rate; income; Brazil. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijcome:v:13:y:2023:i:1:p:23-34

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