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The Economics of Consumption – Theory and Evidence - Oxford Scholarship Online
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The Economics of Consumption: Theory and Evidence

Tullio Jappelli and Luigi Pistaferri


Consumption decisions are crucial determinants of business cycles and growth. Knowledge of how consumers respond to the economic environment and how they react to the risks that they encounter during the life cycle is therefore crucial for evaluating stabilization policies and the effectiveness of fiscal packages implemented in response to economic downturns or financial crises. Do anticipated income changes have a different impact on consumption than unanticipated shocks? Do all consumers respond in the same way, or does the response vary by the economic circumstances and consumers’ character ... More

Keywords: consumption, intertemporal models, life cycle hypothesis, precautionary saving, liquidity constraints, anticipated income changes, unanticipated income changes

Bibliographic Information

Print publication date: 2017 Print ISBN-13: 9780199383146
Published to Oxford Scholarship Online: October 2017 DOI:10.1093/acprof:oso/9780199383146.001.0001


Affiliations are at time of print publication.

Tullio Jappelli, author
Professor of Economics, University of Naples Federico II, Research Fellow, Centre for Economic Policy Research, London, and Research Fellow, Center for Financial Studies, Frankfurt

Luigi Pistaferri, author
Professor of Economics, Stanford University, and Ralph Landau Senior Fellow, Stanford Institute for Economic Policy Research