[go: up one dir, main page]
More Web Proxy on the site http://driver.im/ Skip to main content
Log in

The short-run and long-run behaviour of personal consumption in Croatia

  • Original Paper
  • Published:
Central European Journal of Operations Research Aims and scope Submit manuscript

Abstract

In this paper cointegration and error correction models are used to explore the long run and short run behavior of personal consumption in Croatia as a function of income, house prices and total credit to households. The results of the analysis showed that income (approximated by net real wage), house price and total credits to households play an important role in determining personal consumption. Also, lagged values of house prices showed significant impact on consumption, suggesting house price persistence. The most likely factors driving the house price persistence may include expectations and idiosyncratic institutional characteristics like illiquid real estate markets, inadequate property rights protection, high transaction costs, and underdeveloped financial instruments.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
£29.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price includes VAT (United Kingdom)

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Acharya VV, Schnabl P (2009) How banks played the leverage game. In: Acharya VV, Richardson M (eds) Restoring financial stability: how to repair a broken system. Wiley, London

    Chapter  Google Scholar 

  • Annett A (2005) House prices and monetary policy in the Euro area, chapter III in Euro area policies: selected issues. Imf Country Report, No. 266, Imf, Washington

  • Bahovec V, i Erjavec N (2009) Uvod u ekonometrijsku analizu. Element, Zagreb

    Google Scholar 

  • Bernheim BD, Scholz JK (1993) Private saving and public policy. Tax Policy Econ, 7

  • Čibarić I (2010) Analiza odrednica private štednje u Republici Hrvatskoj primjenom modela vektorske autoregresije, postgraduate specialist paper. Faculty of Economics and Business, Zagreb

    Google Scholar 

  • Corbo V, Schmidt-Hebbel KS (1991) Public policies and saving in developing countries. Policy, Research and External Affairs Working Papers. World Bank

  • Croatian Bureau of Statistics. http://www.dzs.hr

  • Croatian National Bank. http://www.hnb.hr

  • Dougherty C (2006) Introduction to Econometrics, 3rd edn. Oxford University Press, Oxford

    Google Scholar 

  • Duca JV, Muellbauer J, Murphy A (2010) Housing markets and the financial crisis of 2007–2009, lessons for the future. J Financ Stab 6: 203–217

    Article  Google Scholar 

  • Dumičić K, Čibarić I (2010) The analysis of household savings in Republic of Croatia using cointegration approach. Bus Rev Cambr 15(1):220–226 (ISSN: 1553-5827)

    Google Scholar 

  • Gartner M (2006) Macroeconomics, 2nd edn. Prentice Hall/Financial Times, Harlow

    Google Scholar 

  • Harris RID (1995) Using cointegration analysis in econometric modelling. Prentice hall, London

    Google Scholar 

  • Hort K (1998) The determinants of urban house price fluctuations in Sweden 1968–1994. J Hous Econ 7(2): 93–120

    Article  Google Scholar 

  • Hussein KA, Thirlwall AP (1999) Explaining differences in the domestic savings ratio across countries: a panel data study. J Dev Stud, 36

  • IMF (2009) Global financial stability report: responding to the financial crisis and measuring systemic risks, April 2009. http://www.imf.org/external/pubs/ft/gfsr/2009/01/index.htm

  • Jappelli T, Pagano M (1998) The determinants of saving: lessons from Italy. Centre for Studies in Economics and Finance Working paper. Department of Economics, Universit? di Salerno (Italy)

  • Johansen S (1988) Statistical analysis of cointegration vectors. J Econ Dyn Control 12(2–3): 231–254

    Article  Google Scholar 

  • Johansen S (1991) Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregression. Econometrica 59(6): 1551–1580

    Article  Google Scholar 

  • Lamont O, Stein J (1999) Leverage and house-price dynamics in US cities. RAND J Econ 30(3): 498–514

    Article  Google Scholar 

  • Lettau M, Ludvigson S (2004) Understanding trend and cycle in asset values: reevaluating the wealth effect on consumption. Am Econ Rev 94: 276–299

    Article  Google Scholar 

  • Loayza N, Schmidt-Hebbel K, Serven L (2000) What drives private saving across the world? Rev Econ Stat 82(2)

  • Lovrinčević Ž (2000) Analiza agregatne potrošnje u Hrvatskoj. PhD thesis, Faculty of Economics and Business Zagreb

  • Maddala GS (2006) Introduction to econometrics, 3rd edn. Wiley, London

    Google Scholar 

  • Maddala GS, Kim I-M (1998) Unit roots, cointegration and structural change. Cambridge University Press, Cambridge

    Google Scholar 

  • MacKinnon JG (1996) Numerical distribution functions for unit root and cointegration tests. J Appl Econ 11: 601–618

    Article  Google Scholar 

  • Mankiw NG (1997) Macroeconomics, 3rd edn. Worth Publishers, New York

    Google Scholar 

  • Posedel P, Vizek M (2009) House price determinants in transition and EU-15 countries. Post Commun Econ 21(3): 327–343

    Article  Google Scholar 

  • Posedel P, Vizek M (2010) The nonlinear house price adjustment process in developed and transition countries, EIZ Working Papers, No. EIZ-WP-1001. The Institute of Economics, Zagreb, Zagreb

  • Vizek M (2010) Short-run and long-run determinants of house prices in eastern and western European Countries. Privredna kretanja i ekonomska politika 125/2010, pp 27–60

  • Wooldridge JM (2008) Introductory econometrics: a modern approach, 4th edn. South-Western College Pub, Stamford

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Ksenija Dumičić.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Dumičić, K., Časni, A.Č. & Palić, I. The short-run and long-run behaviour of personal consumption in Croatia. Cent Eur J Oper Res 21 (Suppl 1), 3–11 (2013). https://doi.org/10.1007/s10100-012-0254-7

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10100-012-0254-7

Keywords

Navigation