Household Consumption Through Recent Recessions
This paper examines trends in household consumption and saving behaviour in each of the last three recessions in the UK. The ‘Great Recession’ has been different from those that occurred in the 1980s and 1990s. It has been both deeper and longer, but also the composition of the cutbacks in expenditure differs, with a greater reliance on cuts to nondurable expenditure than was seen in previous recessions, and the distributional pattern across individuals differs. The young have cut back expenditure more than the old, as have mortage holders compared to renters. By contrast, the impact of the recession has been similar across education groups. We present evidence that suggests that two aspects of fiscal policy in the UK in 2008 and 2009 - the temporary reduction in the rate of VAT and a car scrappage scheme – had some success in encouraging households to increase durable purchases.
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095, School of Economics and Finance, Queensland University of Technology.
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"Consumption, Income and Earnings Inequality in Britain,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 76-102, January.
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- Martin Browning & Thomas F. Crossley, 2000. "Luxuries Are Easier to Postpone: A Proof," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 1022-1026, October.
- Paul Gregg & Jonathan Wadsworth, 2010. "Employment in the 2008–2009 recession," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 4(8), pages 37-43, August.
- Mark Aguiar & Erik Hurst, 2005. "Consumption versus Expenditure," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 919-948, October.
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