The Role of Personal Consumption in the Economic System - Case of Slovenia

Personal consumption, according to Keynesian theory, affects economic growth directly and indirectly. This concept can be used in Leontief's input-output analysis by adding an impact assessment through the production chain to an impact assessment through the changed personal, investment and gov...

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Bibliographic Details
Published in:Eastern European economics 2022-09, Vol.60 (5), p.433-451
Main Authors: Wostner, Sonja Šlander, Križanič, France, Brezovnik, Boštjan, Vojinović, Borut
Format: Article
Language:English
Subjects:
Consumer spending
Consumption
Economic growth
Economic structure
Economics
Government spending
Governmental accounting
Input output analysis
Keynesian theory
multiplier
Personal consumption
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Summary:Personal consumption, according to Keynesian theory, affects economic growth directly and indirectly. This concept can be used in Leontief's input-output analysis by adding an impact assessment through the production chain to an impact assessment through the changed personal, investment and government spending that follows. Accounting for an increase in personal consumption, we have estimated the multiplier for Slovenia in 2015 to equal 2.5. Pursuant to Engel's law, the economic structure changes with the growth of personal consumption. The growth of personal consumption leads to a transition of the economy from primary to secondary and tertiary stages.
ISSN:0012-8775
1557-9298
DOI:10.1080/00128775.2022.2098146