EconPapers    
Economics at your fingertips  
 

Wealth effects on consumption in financial crises: the case of Norway

Eilev Jansen ()

Empirical Economics, 2013, vol. 45, issue 2, 873-904

Abstract: A dynamic consumption function, where consumption in the long run is determined by households’ disposable income and wealth, has been superior to the Euler equation in explaining the development of Norwegian aggregate consumption over several decades. This period covers the years of financial deregulation in the mid 1980s, the banking crisis around 1990 following the deregulation and the current international financial crisis. In the current version, long run consumption is homogeneous in income and wealth and there is also a significant effect from after-tax real interest rates. A change in the correlation pattern between real interest rates and wealth, which is related to a change in the monetary policy regime, is the reason why both variables need to be included in the long run relationship in order to explain the development over the period 2005q1–2008q4. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Financial crisis; Consumption; Wealth effects; Interest rates; Savings rate; C51; C52; C53; E21 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s00181-012-0640-y (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Wealth effects on consumption in financial crises: the case of Norway (2010) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:45:y:2013:i:2:p:873-904

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-08-10
Handle: RePEc:spr:empeco:v:45:y:2013:i:2:p:873-904