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Euro Area Income and Wealth Effects: Aggregation Issues

Author

Listed:
  • Gabe de Bondt
  • Arne Gieseck
  • Pablo Herrero
  • Zivile Zekaite

Abstract

This empirical study for private consumption in the euro area and the four largest euro area countries validates the need to separate components of income and supports the common practice to split wealth. A focus on income and wealth components avoids an aggregation bias in estimated income and wealth effects. It finds little evidence in favour of an extensive country aggregation issue given direct euro area estimates of income and wealth propensities and forecasts for consumption are not too different from those indirectly aggregated across the four largest euro area countries.

Suggested Citation

  • Gabe de Bondt & Arne Gieseck & Pablo Herrero & Zivile Zekaite, 2021. "Euro Area Income and Wealth Effects: Aggregation Issues," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(6), pages 1454-1474, December.
    • Handle: RePEc:bla:obuest:v:83:y:2021:i:6:p:1454-1474
    DOI: 10.1111/obes.12444
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    2. Foltas, Alexander, 2024. "Inefficient forecast narratives: A BERT-based approach," Working Papers 45, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.

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