Summary and policy implications
In this paper, we presented data on recent trends in private consumption and in possible
determinants of private consumption (such as GDP, household incomes, household saving
rates, household wealth, and employment conditions) in the G7 countries and found that
there has been significant variability among the Group of Seven (G7) countries not only in
their private consumption growth rates but also in the determinants of private consumption
growth during the 2002–2007 period, with the relative importance of GDP growth, household
income growth, household saving rates, household wealth, and employment conditions
varying from country to country.
With respect to Japan, we found that private consumption has been relatively stagnant
during the 2002–2007 period and that the stagnation of private consumption has been due
to the stagnation of household income and of household wealth and the relative stability of
the household saving rate.