The Wealth and ist Effect on the Consumption in the Context of the Global Crisis: The Case of the Economic and Monetary Union (EMU)

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Vicente Menezes Ferreira Junior
Óscar Rodil Marzábal
University of Santiago de Compostela
Spain
Vol 21 (2012): Crisis in the Eurozone, Articles
DOI: https://doi.org/10.15304/rge.21.Extra.428
Submitted: 10-10-2012 Accepted: 10-10-2012
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Abstract

The recent global financial crisis has emerged causing a strong impact on the growth of the main European economies. This crisis is producing extremely adverse effects on the real activity of the economy through diverse channels. Among these is the effect wealth, which sup-poses that the variation of the wealth levels can be leading to a variation in the private consump-tion. Therefore, this article has as the primary goal to analyze the evolution of the wealth levels and its resulting effect on the consumption, using aggregated macro data of ten EMU countries during the 2000-2010 quarterly periods.

Keywords:

Wealth effect, Consumption, Financial crisis, Economic and monetary union, Europe
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References

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