Author(s)

Alan Kai Ming Au, Matthew C. H. Yeung^*

Lee Shau Kee School of Business and Administration, The Open University of Hong Kong, Hong Kong, China.

The study uses the cointegration and common cycle analysis to test whether there are short-run and long-run co-movement relationships between incomes and varies consumption expenditure variables. The analysis aims to detect the long-run co-movements between income and five types of consumption variables, which provides supporting evidence for the common brief that income drives consumption in the long-run. In addition, the analysis also attempts to detect if there are short-run co-movements between income and consumption.

Common Cycles, Common Features, Cointegration, Consumers’ Expenditure

Ming Au, A. and Yeung, M. (2018) Short-Run and Long-Run Co-Movements in the Income-Consumption Relationship. Theoretical Economics Letters, 8, 814-819. doi: 10.4236/tel.2018.85057.