Determinants of Private Consumption Expenditure in Egypt : ARDL Study

The paper aims to study the relationship between private consumption expenditure and independent variables that include GDP, population number, interest rate, and inflation rate in Egypt during the period from 1955 to 2018 using the Autoregressive Distributed Lag Model The research also aims to study the effect of displacement between private consumption spending and government consumption spending using a model( ARDL) The study concluded that there is a positive and significant relationship between private consumption spending and both output and population in the long run. While there is an inverse and significant relationship between private consumer spending and both interest rates and government consumer spending in the long run. This supports the effect of the displacement between the private consumption agreement and government consumption spending in Egypt. In the short term, there is a positive and significant relationship between private consumption spending and both output and population. While there is an inverse relationship between consumer spending Private and short-term interest rate. Hence, the central bank can use monetary policy tools in order to influence the intermediate objective of monetary policy and influence private consumer spending and aggregate demand, as well as taxes can be used as one of the fiscal policy tools to influence disposable income in order to change private consumer spending and aggregate demand