Selected aspects of consumption function in the Czech Republic in the nineties

The character of the consumption function analysis in the Czech Republic is determined by short and non-stable period of the last ten years. The development of consumption in 1990 - 2000 can be divided into four partial different periods. The time series used in the econometric analysis are short. There are two principal econometric approaches to consumption function: Davidson, Hendry, Srba, Yeo approach and rational expectation approach based on the Hall's and Flavin's work. The permanent income hypothesis tests follow the rational expectation framework. The econometric models of consumption function based on the disposable and labor income reject the permanent income-life cycle hypothesis in the condition of the Czech Republic.

Keywords: econometric model, rational expectations, time series, consumption function