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How have households adjusted their spending and saving behaviour to cope with high inflation?

Author

Listed:
  • Bobasu, Alina
  • Charalampakis, Evangelos
  • Kouvavas, Omiros

Abstract

This box investigates how households have responded to the 2021-23 inflationary episode using evidence from the ECB’s Consumer Expectations Survey. The findings suggest that households have primarily adjusted their consumption spending to cope with higher inflation. However, noteworthy adjustments were also observed through the saving and income margins. The decline in the saving rate in 2022 and 2023 was mainly attributed to increased spending on recreation and travel, mostly driven by high-income consumers. JEL Classification: E21, D14, D15

Suggested Citation

  • Bobasu, Alina & Charalampakis, Evangelos & Kouvavas, Omiros, 2024. "How have households adjusted their spending and saving behaviour to cope with high inflation?," Economic Bulletin Boxes, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbbox:2024:0002:3
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    File URL: https://www.ecb.europa.eu//press/economic-bulletin/focus/2024/html/ecb.ebbox202402_03~289573ea78.en.html
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    More about this item

    Keywords

    consumption; inflation surge; savings;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving

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