The Role of Household Consumption in a Very Small, Very Open Economy

Zuzana Stoličná () and Lucia Klapáčová ()
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Zuzana Stoličná: Comenius University
Lucia Klapáčová: Comenius University

A chapter in Eurasian Business and Economics Perspectives, 2023, pp 453-468 from Springer

Abstract: Abstract. We witness different financial and economic crises, whose impact we can perceive in our wallets and standard of living. Household consumption varies from individual European countries with respect to the economic situation. The article points out the sustainability of the economy and the role of household consumption in a very small, very open economy. The main aim of the article is to highlight importance of household consumption in Slovak Republic. Our aim is also to analyze the economic situation and financial reserves of Slovak households. Data from the freely available Eurostat database were used to achieve the goal. Within the processing of the information, several research methods such as synthesis, analysis, and deduction were applied. The most appropriate model is the autoregressive integrated moving average model (the ARIMA model). Based on historical data, the consumption prediction for selected country was created. Time series for the period 1995–2020 were used to estimate consumption in Slovakia. The model with its estimated parameters were identified and tested. The most appropriate ARIMA model was used to forecast the evolution of the time series. Predictions consist of a point estimate and 80% and 95% confidence intervals. The conclusion is devoted to the analysis of the results of consumption models and their interpretation. As we pointed out, Slovakia continues to be a growing GDP trend as well as in household consumption growth. The results of the analysis demonstrate that Slovakia’s household consumption is growing vigorously. Results suggest household consumption changes over time and it is influenced by external factors.

Keywords: Gross domestic product; Consumption; Time series; Analysis; ARIMA model (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:eurchp:978-3-031-30061-5_28

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DOI: 10.1007/978-3-031-30061-5_28

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