TY  - UNPD
A1  - Christelis, Dimitris
A1  - Georgarakos, Dimitris
A1  - Jappelli, Tullio
T1  - Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 471
N2  - We use data from the 2009 Internet Survey of the Health and Retirement Study to examine the consumption impact of wealth shocks and unemployment during the Great Recession in the US. We find that many households experienced large capital losses in housing and in their financial portfolios, and that a non-trivial fraction of respondents have lost their job. As a consequence of these shocks, many households reduced substantially their expenditures. We estimate that the marginal propensities to consume with respect to housing and financial wealth are 1 and 3.3 percentage points, respectively. In addition, those who became unemployed reduced spending by 10 percent. We also distinguish the effect of perceived transitory and permanent wealth shocks, splitting the sample between households who think that the stock market is likely to recover in a year’s time, and those who do not. In line with the predictions of standard models of intertemporal choice, we find that the latter group adjusted much more than the former its spending in response to financial wealth shocks.
T3  - CFS working paper series - 471 
KW  - Wealth Shocks
KW  - Unemployment
KW  - Consumption
KW  - Great Recession
Y1  - 2014
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/35091
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-350919
UR  - http://ssrn.com/abstract=2506073
IS  - October 2014
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -