Are Habits in Consumption Important for the Propagation of Business Cycle Fluctuations in Bulgaria?

• Autorzy: Aleksandar Vasilev
• Języki publikacji: EN

Abstrakty

EN

We introduce consumption habits into a real-business-cycle setup augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999- 2018). We investigate the quantitative importance of the presence of internal consumption habits motive for the propagation cyclical fluctuations in Bulgaria. Allowing for internal habits in household's consumption improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework without habits. Therefore, the computational experiments performed in this paper suggest that habits are a quantitatively important model ingredient, which should be taken into consideration when analysing the effects of different policies in Bulgaria. This result can be viewed as an empirical validation of the habit model, and a rejection of the model without habits in the case of Bulgaria. In addition, we also demonstrate that internal habits are quantitatively more important than external habits for the Bulgarian business cycle. (original abstract)

Słowa kluczowe

EN

Business fluctuations; Consumption patterns; Consumption in household

PL

Wahania koniunkturalne; Wzorce konsumpcji; Konsumpcja gospodarstw domowych

• Czasopismo: Central European Journal of Economic Modelling and Econometrics (CEJEME)
• Rocznik: 2019
• Tom: 11
• Numer: nr 3
• Strony: 133--151

Twórcy

autor

Aleksandar Vasilev

• Lincoln International Business School, UK

Bibliografia

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Identyfikatory

DOI

DOI: 10.24425/cejeme.2019.130675