Impact of Wealth on the Consumption of Private Sector in Iran
Subject Areas : Labor and Demographic Economics
سارا امامقلی پور
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لطفعلی عاقلی
2
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Keywords:
Abstract :
In this paper, the effect of financial wealth on private sector consumption is tested. The estimation of Auto-Regressive Distributed Lags (ARDL) model by using quarterly data during 1996Q1-2010Q4 represents that the marginal propensity to consume out of disposable income is 0.361 and 0.686 in the short and long-term respectively, and it will be 0.261 and 0.497 respectively when consuming financial wealth. In addition, Error Correction Model (ECM) explains moderate adjustment of short-term imbalances with a factor of -0.525.
