Appended Note 1-2 Estimation Result of Long-term Equilibrium of Consumption

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1. Estimation of long-term equilibrium of consumption

Real consumption expenditure has cointegration with real compensation of employment, net balance of financial assets, and population ratio of people aged 60 or older. By using them as explaining variables, we estimated a long-term balance equation.

2. Error correction model

Source:	National Accounts, Consumer Confidence Survey, Cabinet Office; Population Estimates, Family Income and Expenditure Survey, Ministry of Internal Affairs and Communications; Flow of Funds Accounts, Bank of Japan
Note: 1.	Real private consumption, real compensation of employment, and consumer sentiment index are seasonally adjusted.
2.	The figures of real private consumption and real compensation of employment before 1993 were estimated from the old fixed-based estimates by the Cabinet Office. Real balance of financial assets before 1997 was estimated from old 68 SNA-based figures. denotes variation from preceding quarter.

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