Bulgarian households drive economy with Keynesian consumption decisions.
The article models household consumption in Bulgaria from 1997 to 2005 using an econometric approach called the Error-Correction Model. The researchers found a long-term relationship between household consumption and income. The main goal was to understand what influences household spending in Bulgaria and create a consumption function for forecasting. The study shows that all households in Bulgaria tend to base their spending decisions on their current income, following a Keynesian approach.