Note 1-59

(59) Estimating the National Accounts-based propensity to consume from the 1990s to 2000 by using disposable income, financial asset holdings (ratio of net financial assets to disposable income), and the consumer confidence index (employment conditions) as explanatory variables shows that, in the recession phase after 1997, a decline in consumer confidence sharply reduced the propensity to consume and that, in the economic recovery phase after 1999, an improvement in consumer confidence and an increase in financial assets brought about by a rise in stock prices contributed to a rise in the propensity to consume (See Appended Note 1-8). It suggests that a decline in consumer confidence and a decrease in stock holdings due to falls in stock prices pushed the propensity to consume downward in 2001.