Consumption and Wealth in Australia |
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| Authors: | Alvin Tan Graham Voss |
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| Affiliation: | Financial Markets Group, Reserve Bank of Australia, Sydney, Australia;, University of Victoria, Canada; |
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| Abstract: | 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. |
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