The study explores the application of demand theory in studying consumer spending behaviour and policy analysis, with a focus on food demand and consumption patterns. It reviews various demand function systems and introduces the differential approach as a superior method for modelling demand....

The Eurozone countries share a common currency: the Euro operated and managed by the European Central Bank (ECB). The implications are that savings and wealth levels are also denominated in the same currency. Does this mean that wealth factors like home equity and pension savings can be...

This study sheds new light on the question of whether or not sentiment surveys, and the expectations derived from them, are relevant to forecasting economic growth and stock returns, and whether they contain information that is orthogonal to macroeconomic and financial data. I examine 16...

The traditional consumption function based on the life cycle permanent income hypothesis (LC-PIH) considers that consumer spending is based on households’ expectations of their future income. However, in short-term forecasting, the traditional economic determinants of consumption do not...

The following analysis, based on error correction models, suggests that consumer confidence, together with traditional macroeconomic variables, contains a forecasting and explicative power on consumption. By including consumer confidence in a consumption function, consumer confidence releases a...

Appendix to the main text

According to Ricardian Equivalence Theorem (RET), today's consumption decisions would be independent of some fiscal variables such as lump sum taxes, government debt outstanding or the budget deficit given that government expenditures are fixed. The Permanent Income Hypothesis (PIH) consumption...

This study sheds new light on the question of whether or not sentiment surveys, and the expectations derived from them, are relevant to forecasting economic growth and stock returns, and whether they contain information that is orthogonal to macroeconomic and financial data. I examine 16...

This paper attempts a broad appraisal of the literature on macro consumption function in Islamic economics. It starts with a brief look at the microelements of the concept and clears several cobwebs concerning wants and needs, scarcity of resources, the basket of goods, and the efficacy of...

This is a short survey on consumption theory. Consumption is important to both fluctuation and growth. In addition, consumption introduces some important issues involving financial markets and portfolio decisions. We will describe consumption decisions in a dynamic context. Uncertainty about...