Behavior

Consumption Investment Open Economy Money & Prices

Economy does not lie in sparing money, but in spending it wisely.

— Thomas Henry Huxley

Economics 302: Macroeconomic Analysis

Consumption

Background:

Blanchard, chapter 3 (pp. 46–47); chapter 16 (pp. 336–342); chapter 14 (pp. 293–298).

Analysis:

Marquis, Milt. "What's Behind the Low U.S. Personal Saving Rate?" Federal Reserve Bank of San Francisco Economic Letter #2002-09, March 29, 2002.
Browning, Martin and Thomas F. Crossley. "The Life-Cycle Model of Consumption and Saving," Journal of Economic Perspectives, vol. 15, no. 3 (Summer 2001), pp. 3–22.

In The News:

Hilsenrath, Jon E. "Isn't This Rich? Spending By Wealthy Boosts Economy," Wall Street Journal, October 13, 2003.
Uchitelle, Louis. "Why Americans Must Keep Spending," New York Times, December 1, 2003

Going Further:

Ludvigson, Sydney and Charles Steindel. "How Important Is the Stock Market Effect on Consumption?" Economic Policy Review, Federal Reserve Bank of New York, vol. 5, no. 2 (July 1999).
Leonhardt, David. "Incremental Analysis, With Two Yards to Go," New York Times, February 1, 2004.