National income dynamics: unveiling the impact of households' consumption during crisis and innovation era

Purpose The main purpose of this study is to examine the impact of selected macroeconomic indicators, crises and innovation on national income dynamics, focusing on the changes driven by household consumption behaviour during the recent crisis and innovation era. Design/methodology/approach The study employed the Autoregressive Distributed Lag (ARDL) bound testing approach to investigate the relationships between macroeconomic factors, household consumption, crises and innovation, assessing both short-term and long-term effects on national income fluctuations. Findings The findings indicate that macroeconomic factors, including household consumption, significantly influence national income dynamics. Crises, such as the pandemic and economic downturns, played a critical role in driving fluctuations in national income. Meanwhile, innovation was found to promote national income growth in the short term. However, no long-term relationship was observed, suggesting that the quality of innovation, rather than its quantity, is vital for sustaining national income growth over time. Originality/value Unlike studies in the past, this study will explore the joint effects of macroeconomic factors, crises and innovation in shaping national income dynamics. This allows it not just to underscore the importance of focusing on macroeconomic factors and high-quality innovation to achieve sustainable economic growth but also to offer a nuanced understanding of how crises influence national income patterns.