The Wealth Effect in the Eurozone

  • Óscar Rodil-Marzábal University of Santiago de Compostela, Department of Applied Economics, Spain
  • Vicente Menezes-Ferreira-Junior Banco Central do Brasil, Brazil


The recent global financial crisis represents a serious threat to the growth of economies. This crisis deeply affects the real economy through a phenomenon known as the wealth effect, which assumes that a fall in wealth leads to a reduction of private consumption. Thus, this paper analyzes the wealth effect on consumption using quarterly macro-data for 10 Eurozone countries in the period 2000-2010. The results suggest the existence of a positive and significant wealth effect on consumption with the predominance of a financial effect on housing, showing larger consumption sensitivity to changes in the value of financial assets.

Key words: Wealth, Consumption, Crisis, Eurozone.
JEL: E21, G01, O52.

How to Cite
Rodil-Marzábal Ó., & Menezes-Ferreira-Junior V. (2016). The Wealth Effect in the Eurozone. Panoeconomicus, 63(1), 87-112. doi:10.2298/PAN1601087R
Original scientific paper