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We attempt to disentangle income and wealth effects on consumption by disaggregating both the different types of income and wealth. We estimate a consumption function for a panel of quarterly data for 14 advanced economies spanning 1998 to 2012, using an error correction specification. We find a significant long-term relation between consumption and the different components of income and wealth. While fiscal policy had direct effects on consumption, the analysis suggests that wealth effects were sizeable, and therefore need to be kept in mind when analyzing consumption trends going forward.

Consumption (Economics) -- Developed countries -- Case studies. --- Consumption (Economics) -- Developed countries. --- Fiscal policy -- Developed countries -- Case studies. --- Fiscal policy -- Developed countries. --- Income -- Developed countries -- Case studies. --- Income -- Developed countries. --- Wealth -- Developed countries -- Case studies. --- Wealth -- Developed countries. --- Economic Theory --- Business & Economics --- Infrastructure --- Macroeconomics --- Taxation --- Macroeconomics: Consumption --- Saving --- Wealth --- Fiscal Policy --- Consumer Economics: Empirical Analysis --- Fiscal Policies and Behavior of Economic Agents: Household --- Aggregate Factor Income Distribution --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Welfare & benefit systems --- Consumption --- Income --- Private consumption --- Social security contributions --- National accounts --- Taxes --- Economics --- Social security --- Saving and investment --- Spain