The Dynamics of Household Consumption in Romania during Economic Crisis

Abstract In this paper we analyze the correlation between household consumption and the main factors that act in this area using Error Correction mechanism. The dynamics of the consumption data and its main determinants reveals a period of about one year (2009) in which the shock of the economic crisis were strongly felt, followed by a period of policy designed to counter its effects. The lengthening of the economic crisis does not allow a return to a period of real consumption growth, only the ending of the negative developments. However the short-term dynamic equation indicates the possibility of a quick convergence toward the long-term equilibrium.