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Consumption and Wealth in Australia
Author(s) -
Tan Alvin,
Voss Graham
Publication year - 2003
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.00077
Subject(s) - consumption (sociology) , economics , permanent income hypothesis , wealth effect , consumption function , aggregate (composite) , autonomous consumption , econometrics , wealth distribution , monetary economics , macroeconomics , microeconomics , aggregate expenditure , production (economics) , monetary policy , life cycle hypothesis , inequality , social science , materials science , sociology , composite material , mathematical analysis , mathematics
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.