1. The wealth effect in the Eurozone
- Author
-
Rodil-Marzábal Óscar and Menezes-Ferreira-Junior Vicente
- Subjects
wealth ,consumption ,crisis ,Eurozone ,Economic theory. Demography ,HB1-3840 - Abstract
The recent global financial crisis represents a serious threat to the growth of economies. This crisis deeply affects the real economy through a phenomenon known as the wealth effect, which assumes that a fall in wealth leads to a reduction of private consumption. Thus, this paper analyzes the wealth effect on consumption using quarterly macro-data for 10 Eurozone countries in the period 2000-2010. The results suggest the existence of a positive and significant wealth effect on consumption with the predominance of a financial effect on housing, showing larger consumption sensitivity to changes in the value of financial assets.
- Published
- 2016
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