New models for South African consumption, house prices, and mortgage and non-mortgage debt: Insights for financial stability and monetary transmission

Janine Aron and John Muellbauer

No wp-2025-8, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Aggregate consumption typically exceeds 60 per cent of GDP and should be pivotal in central bank policy models. Most use semi-structural macro-models, yet consumption is usually inadequately specified. We use a systems approach to estimate new equations for South African consumption, house prices, mortgage and non-mortgage debt, and income forecasting. A credit-augmented consumption function approach introduces a greater role for uncertainty and a key role for credit conditions, and varies the spendability of different wealth components.

Keywords: Consumption; House prices; Credit; Household Debt; Monetary policy; Households balance sheets (search for similar items in EconPapers)
Date: 2025
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