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

Aleksandar Vasilev

doi:10.1515/zireb-2015-0005

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

Zagreb International Review of Economics and Business

Volume 18 (2015): Issue 1 (May 2015)

By: Aleksandar Vasilev

Open Access

|May 2015

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.

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Articles in this issue

DOI: https://doi.org/10.1515/zireb-2015-0005 | Journal eISSN: 1849-1162 | Journal ISSN: 1331-5609

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Language: English

Page range: 81 - 89

Published on: May 22, 2015

Published by: University of Zagreb, Faculty of Economics & Business

In partnership with: Paradigm Publishing Services

Publication frequency: 2 issues per year

Keywords:

Keynesian consumption function,

Permanent Income Hypothesis,

Error Correction Model

Related subjects:

Business and economics,

Political economics,

Macroeconomics,

Public finance and fiscal theory,

Business management,

Marketing, sales, customer relations,

Management, organization, corporate governance

© 2015 Aleksandar Vasilev, published by University of Zagreb, Faculty of Economics & Business
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Volume 18 (2015): Issue 1 (May 2015)