Consumption and Wealth in Australia
18 Pages Posted: 12 Jun 2003
This paper examines the relationship between consumption and wealth in Australia. We find a steady-state relationship between non-durables consumption, labour income and aggregate household wealth for the period 1988-1999. We also find that changes in both non-financial and financial assets have significant but different short-run and long-run effects in dynamic consumption models. Finally, we place our results within the broader empirical literature and examine whether they are consistent with standard theories of consumption.
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