Persistence in China’s household consumption level: implications for the new growth model

Abstract In this paper, we investigate the statistical features of China’s household consumption level by calculating its degree of persistence and testing for the existence of trends in the data. Further, we contrast the results obtained in China with those corresponding to the G7 economies and in the other three countries that make up the fastest developing BRICs group, that is, Brazil, Russia and India. Our results show large degrees of heterogeneity depending on the country and the model used for the analysis though, in general, lower degrees of dependence and thus, more evidence of transitory shocks is observed in China and the rest of BRIC economies than in the G7 countries.