Consumption and the Great Recession
Abstract
We document some key facts about aggregate consumption and its subcomponents over time. We then document the behavior of some important determinants of consumption, such as consumers’ expectations about their future income, and changes in the consumers’ wealth positions. Finally, we use a simple permanent income model to show that the observed drop in consumption during the Great Recession can be explained by the observed drops in wealth and income expectations.Download Info
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Bibliographic Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17688.Length:
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:nbr:nberwo:17688
Note: EFG PE
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Related research
Keywords:Other versions of this item:
- Mariacristina De Nardi & Eric French & David Benson, 2012. "Consumption and the Great Recession," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 1-16.
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-03 (All new papers)
- NEP-DGE-2012-01-03 (Dynamic General Equilibrium)
- NEP-MAC-2012-01-03 (Macroeconomics)
- NEP-MKT-2012-01-03 (Marketing)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Alan, S. & Crossley, T. & Low, H., 2012.
"Saving on a Rainy Day, Borrowing for a Rainy Day,"
Cambridge Working Papers in Economics
1222, Faculty of Economics, University of Cambridge.
- Sule Alan & Thomas Crossley & Hamish Low, 2012. "Saving on a rainy day, borrowing for a rainy day," IFS Working Papers W12/11, Institute for Fiscal Studies.
- Sule Alan & Thomas Crossley & Hamish Low, 2012. "Saving on a Rainy Day, Borrowing for a Rainy Day," Koç University-TUSIAD Economic Research Forum Working Papers 1212, Koc University-TUSIAD Economic Research Forum.
- John Sabelhaus & Samuel Ackerman, 2012. "The effect of self-reported transitory income shocks on household spending," Finance and Economics Discussion Series 2012-64, Board of Governors of the Federal Reserve System (U.S.).
- Eric French & Taylor Kelley & An Qi, 2013. "Expected income growth and the Great Recession," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 14-29.
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