The American consumer : reforming, or just resting?

American households have received a triple dose of bad news since the beginning of the current recession: The greatest collapse in asset values since the Great Depression, a sharp tightening in credit availability, and a
American households have received a triple dose of bad news since the beginning of the current recession: The greatest collapse in asset values since the Great Depression, a sharp tightening in credit availability, and a large increase in unemployment risk. We present measures of the size of these shocks and discuss what a benchmark theory says about their immediate and ultimate consequences. We then provide a forecast based on a simple empirical model that captures the effects of wealth shocks and unemployment fears. Our short-term forecast calls for somewhat weaker spending, and somewhat higher saving rates, than the Consensus survey of macroeconomic forecasters. Over the longer term, our best guess is that the personal saving rate will eventually approach the levels that preceded period of financial liberalization that began in the late 1970s. Classification: C61, D11, E24 Keywords: Consumption/Saving Forecast, Credit Crunch, Financial Crisis
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Metadaten
Author:Christopher D. Carroll, Jiri Slacalek
URN:urn:nbn:de:hebis:30-68317
Series (Serial Number):CFS working paper series (2009, 12)
Document Type:Working Paper
Language:English
Date of Publication (online):2009/08/14
Year of first Publication:2009
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2009/08/14
Tag:Consumption/Saving Forecast ; Credit Crunch ; Financial Crisis
HeBIS PPN:214920399
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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