Modelling consumption on the basis of the complete system of national accounts in Serbia - the wealth effect

Abstract

System of National Accounts (SNA) data on the financial and non-financial assets of the household sector are not currently being compiled by official statistics in Serbia, but this situation will change on the path of convergence to the standards of EU economic and monetary union. This paper, starting from models of consumption in developed and some former transition countries that take into account the wealth effect based on the whole SNA, analyses if this effect is taking place in Serbia. Research, based on available data sources, has shown that the wealth variables of securities and net financial wealth enter the consumption function in Serbia and it is yet to be seen if this model will be different at some higher stage of economic development or with better data.

Keywords

• consumption function
• national accounts
• wealth effect
• time series analysis