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

Aleksandar Vasilev

Zagreb International Review of Economics and Business, 2015, vol. 18, issue 1, 81-89

Abstract: 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. JEL Classification: E21; E27

Keywords: Keynesian consumption function; Permanent Income Hypothesis; Error Correction Model (search for similar items in EconPapers)
Date: 2015
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Journal Article: Modeling Real Private Consumption Expenditure in Bulgaria after the Currency Board Implementation (1997-2005) (2015)
Working Paper: Modeling Real Private Consumption Expenditure in Bulgaria after the Currency Board Implementation (1997-2005) (2015)
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