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

Dimitris Georgarakos, Dimitris Christelis and Tullio Jappelli ()

No 1762, Working Paper Series from European Central Bank

Abstract: Data from the 2009 Internet Survey of the Health and Retirement Study show that many U.S. households experienced large capital losses in housing and financial wealth, and that 5% of respondents lost their job during the Great Recession. As a consequence of these shocks, many households reduced substantially their expenditures. For every 10% loss in housing and financial wealth, the estimated drop in household expenditure is about 0.56% and 0.9%, respectively. In addition, those who became unemployed reduced spending by 10%. 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 JEL Classification: E21, D91

Keywords: consumption; Great Recession; unemployment; Wealth Shocks (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-ure
Note: 483508
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Citations: View citations in EconPapers (81)

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Related works:
Journal Article: Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession (2015)
Working Paper: Wealth Shocks, Unemployment Shocks and Consumption in the Wake of the Great Recession (2014)
Working Paper: Wealth Shocks, Unemployment Shocks and Consumption in the Wake of the Great Recession (2014)
Working Paper: Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession (2014)
Working Paper: Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession (2011)
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