VAR - MODELS OF SHOCKS IN THE BUSINESS CYCLES OF FINAL CONSUMPTION EXPENDITURE OF HOUSEHOLDS

Abstract

The article has experimented with a methodology for using vector autoregressive models (VAR) to study the impact of shocks in the business climate and economic activity on the business cycles of final consumption expenditure of households. It refers to six countries in Central and Eastern Europe (Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia) for the period 2000 to 2015. The results show that the expectations for the financial situation of households over the next 12 months and the level of employment have a stimulating effect on the business cycle of final consumption expenditure of households. The expectations for unemployment,inflation and savings over the next 12 months have a negative impact on the business cycles.