Raluca-Maria Bălă - Ph.D. student at Economic Cybernetics and Statistics Doctoral School, The Bucharest University of Economic Studies, Romania

The purpose of this study is to analyze private consumption in Romania from a time series modelling perspective having as a starting point thehypothesis of the random walk theory of consumption. The random walk model of consumption was initiated by the economist Robert Hall (1978) who described consumption as a function of only consumptionfrom the previous period plus the error (innovation) term. The Box- Jenkins method was employed for the analysis by using annual data of private consumption in Romania for the period 1970-2013 measured in 1970 bln. $ constant prices. The final results revealed that private consumption in Romania is better characterized by an AR(4) process thus invalidating the hypothesis of following an AR(1) model

private consumption, random-walk consumption theory, autoregressive model, Box-Jenkins