TITLE:
Short-Run and Long-Run Co-Movements in the Income-Consumption Relationship
AUTHORS:
Alan Kai Ming Au, Matthew C. H. Yeung
KEYWORDS:
Common Cycles, Common Features, Cointegration, Consumers’ Expenditure
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.5,
April
2,
2018
ABSTRACT: The study uses the cointegration and common cycle
analysis to test whether there are short-run and long-run co-movement
relationships between incomes and varies consumption expenditure variables. The
analysis aims to detect the long-run co-movements between income and five types
of consumption variables, which provides supporting evidence for the common
brief that income drives consumption in the long-run. In addition, the analysis
also attempts to detect if there are short-run co-movements between income and
consumption.