The U.S. Consumption Analysis: Using a Linear Regression Model

Recent U.S. consumption has decreased, although it is the most significant factor in economic growth. Using a linear regression model, this paper shows that consumption is influenced by disposable income, oil price, and recession, but is not influenced by interest rates. It will also discuss policies regarding how to improve consumption. The result that the interest rate does not influence consumption is consistent with the view of John Maynard Keynes, but the Granger Causality test implies that past interest rates might be possible to change current consumption considering time lag