Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession

TitleWealth shocks, unemployment shocks and consumption in the wake of the Great Recession
Publication TypeJournal Article
Year of Publication2015
AuthorsChristelis, D, Georgarakos, D, Jappelli, T
JournalJournal of Monetary Economics
Volume72
Pagination21-41
KeywordsConsumption and Savings, Employment and Labor Force, Net Worth and Assets, Public Policy
Abstract

Data from the 2009 Internet Survey of the Health and Retirement Study show that many US households experienced large capital losses in housing and financial wealth, and that 5 of respondents lost their job during the Great Recession. For every loss of 10 in housing and financial wealth, the estimated drop in household expenditure was about 0.56 and 0.9 , respectively. Those who became unemployed reduced spending by 10 . In line with predictions of standard inter-temporal choice models, households who perceived the stock market shock to be permanent adjusted spending much more than those who perceived the shock to be temporary.

URLhttp://www.sciencedirect.com/science/article/pii/S0304393215000069
DOI10.1016/j.jmoneco.2015.01.003
Endnote Keywords

Wealth shocks/Unemployment/Consumption/Great Recession

Endnote ID

999999

Citation Key8185