IDEAS home Printed from
   My bibliography  Save this article

The Assessment: Consumer Expenditure


  • Muellbauer, John


This article aims to illuminate two sets of consumption puzzles. The first concerns the behavior of aggregate saving rates in the 1980s and early 1990s: collapse and rebound in Scandinavia and the U.K., and, apparently, a more secular decline in the U.S. The second set of puzzles concerns various apparent contradictions of the rational expectations permanent income hypothesis, e.g., in time series, the excess sensitivity of consumption changes to anticipated income changes and, in cross-sections, the tendency of consumption and income age-profiles to follow each other more than standard life-cycle theory implies. The article discusses, in relatively non-technical terms, the implications both for Euler equations and solved-out consumption functions of introducing uncertainty, credit constraint, consumption-leisure interactions, habits and durability, alternative to rational expectations, the illiquidity of some assets, and financial deregulation. It also compares the merits of Euler and solved-out models of aggregate consumption. Copyright 1994 by Oxford University Press.

Suggested Citation

  • Muellbauer, John, 1994. "The Assessment: Consumer Expenditure," Oxford Review of Economic Policy, Oxford University Press, vol. 10(2), pages 1-41, Summer.
  • Handle: RePEc:oup:oxford:v:10:y:1994:i:2:p:1-41

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxford:v:10:y:1994:i:2:p:1-41. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.