Empirical Projects

Bundesbank Project: Investigating Private Consumption in the Euro Area (Summer 2024)

As an intern at the DG Economics of the Bundesbank, I researched current dynamics of private consumption in the Euro area. Two main questions were of interest: first, whether the long run relationship between private consumption and its determinants had changed since the COVID-19 pandemic, and second, how short-run consumption fluctuations since 2020 could be explained.

To do so, we estimated an error-correction model (ECM) and performed a principal component analysis (PCA) on sentiment indicator data to include them as additional explanatory variables. We find significant changes in the long-run relationship between consumption and its determinants, driven by income and financial wealth variables.

A more detailed summary is available here.